Tax Justice Digest: What to watch in the states, debunking the supply-side myth

In the Tax Justice Digest we recap the latest reports, blog posts, and analyses from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Here’s a rundown of what we’ve been working on lately. 

What to Watch in the States in 2017
State and federal gas taxes are the cornerstone of our nation’s transportation finance system. But far too many of these taxes are severely outdated and poorly designed. The good news is that state lawmakers are becoming increasingly aware of these problems. Nineteen states have raised or reformed their gas taxes since 2013 and more than a dozen states will debate doing so this year. Read What to Watch in the States: Gas Tax Hikes and Swaps

Or read an updated ITEP policy brief that explains why state gas tax revenues are falling short of the levels needed to build and maintain the nation’s infrastructure.

More than 30 states face budget gaps this year. In spite of this, lawmakers in many states are pursuing tax policies that will drain critical revenues from state coffers. Common sense, however, is prevailing in a smaller number of states where lawmakers are exploring meaningful income tax reforms that could improve the fairness and sustainability of their tax systems. Read What to Watch in the States: Further Attempts to Weaken or Eliminate Progressive Taxes

The Supply-Side Myth Debunked in Two Minutes
Here we go again … and again, and again. Members of Congress and the Trump Administration have signaled corporate and individual tax cuts are on the table this year. Lawmakers in several states, in spite of budget problems, are considering tax cuts.  In most instances, when analysts model the effect of these plans, they find that the wealthy receive a disproportionately large share of the benefit. Meanwhile, these supply-side economic policies eventually force cuts to vital programs and services while working people wait for the financial benefits to trickle down. If you haven’t already, watch ITEP’s two-minute video that debunks the supply-side myth.

Dodging Tough Fiscal Decisions with State Tax Cut Triggers and Phase-ins
State lawmakers are increasingly turning to tax cut phase-ins and triggers as ways to take credit for cutting taxes without having to face the full consequences for years, decades, or in the case of term-limited lawmakers, maybe never. Read more

The State Rundown
For a comprehensive rundown of state tax news, check out the weekly State Rundown. This week’s rundown looks at policy debates in states facing budget challenges. Read more

If you have any feedback on the Digest or tax stories you’re watching that we should check out too please email me rphillips@itep.org

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