The Urban-Brookings Tax Policy Center’s (TPC) microsimulation model produces revenue and distributional estimates of the US federal tax system. This paper describes a reweighting procedure that allows the model to be used for analyzing taxes at the state level. We construct state weights such...
The Urban-Brookings Tax Policy Center’s (TPC) microsimulation model produces revenue and distributional estimates of the US federal tax system. This paper describes a reweighting procedure that allows the model to be used for analyzing taxes at the state level. We construct state weights such...
Corrective taxes can encourage healthier, safer, and less polluting behavior. But how should governments use their revenue? Options abound to cut other taxes, boost spending, or reduce borrowing. We organize those uses into four categories: offsetting new burdens, furthering the same goal,...
The effects of state tax policy on economic growth, entrepreneurship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable...
Cuts in top state income taxes are intended to raise economic growth, but could instead force punishing spending cuts, as revenues fall and states confront borrowing constraints. Previous work shows no clear impact of state taxes on growth. In new research, we build on a widely cited study that...
Changing demographics, technology, and inflation are creating an increasingly difficult environment for state budgets. An aging population puts more pressure on spending programs while reducing tax revenues from some sources. State sales tax revenue systems have not kept up as technology has...
Federal and state income taxes play an important role in providing income support for low-income households by administering refundable tax credits, such as the earned income tax credit (EITC). Using the Urban Institute’s Net Income Change Calculator (NICC), which provides state- and federal-...
April is the most important month of the year for individuals who owe federal and state income taxes and for governments that rely on income taxes as a major source of revenue. Because personal income tax receipts account for about 45 percent of federal government receipts and more than 33...
High net worth investors can reduce the cost of an investment in 29 states by claiming an "angel investor" tax credit. In most states, the credit is worth more than 25 percent of the investments and can be transferred to another taxpayer if it exceeds the investor's liability. States hope the...
The federal government and most states have per-unit gas taxes. Because they tax gallons purchased, and not a percentage of purchase price, revenues are falling across the country as Americans buy less gas. If states do not want to cut transportation projects they now have to increase tax rates...
Incorporating State Analysis into the Tax Policy Center's Microsimulation Model: Documentation and Methodology
The Urban-Brookings Tax Policy Center’s (TPC) microsimulation model produces revenue and distributional estimates of the US federal tax system. This paper describes a reweighting procedure that allows the model to be used for analyzing taxes at the state level. We construct state weights such...
Incorporating State Analysis into the Tax Policy Center's Microsimulation Model: Documentation and Methodology
The Urban-Brookings Tax Policy Center’s (TPC) microsimulation model produces revenue and distributional estimates of the US federal tax system. This paper describes a reweighting procedure that allows the model to be used for analyzing taxes at the state level. We construct state weights such...
How Should Governments Use Revenue from Corrective Taxes?
Corrective taxes can encourage healthier, safer, and less polluting behavior. But how should governments use their revenue? Options abound to cut other taxes, boost spending, or reduce borrowing. We organize those uses into four categories: offsetting new burdens, furthering the same goal,...
The Relationship Between Taxes and Growth at the State Level: New Evidence
The effects of state tax policy on economic growth, entrepreneurship, and employment remain controversial. Using a framework that in prior research generated significant, negative, and robust effects of taxes on growth, we find that neither tax revenues nor top income tax rates bear stable...
The Growth Mirage: State Tax Cuts Do Not Automatically Lead to Economic Growth
Cuts in top state income taxes are intended to raise economic growth, but could instead force punishing spending cuts, as revenues fall and states confront borrowing constraints. Previous work shows no clear impact of state taxes on growth. In new research, we build on a widely cited study that...
Governing with Tight Budgets
Changing demographics, technology, and inflation are creating an increasingly difficult environment for state budgets. An aging population puts more pressure on spending programs while reducing tax revenues from some sources. State sales tax revenue systems have not kept up as technology has...
Federal and State Income Taxes and Their Role in the Social Safety Net
Federal and state income taxes play an important role in providing income support for low-income households by administering refundable tax credits, such as the earned income tax credit (EITC). Using the Urban Institute’s Net Income Change Calculator (NICC), which provides state- and federal-...
Federal Tax Policy Uncertainty and State Revenue Estimates
April is the most important month of the year for individuals who owe federal and state income taxes and for governments that rely on income taxes as a major source of revenue. Because personal income tax receipts account for about 45 percent of federal government receipts and more than 33...
Angel Investor Tax Credits
High net worth investors can reduce the cost of an investment in 29 states by claiming an "angel investor" tax credit. In most states, the credit is worth more than 25 percent of the investments and can be transferred to another taxpayer if it exceeds the investor's liability. States hope the...
Reforming State Gas Taxes
The federal government and most states have per-unit gas taxes. Because they tax gallons purchased, and not a percentage of purchase price, revenues are falling across the country as Americans buy less gas. If states do not want to cut transportation projects they now have to increase tax rates...