Tax Day Resources: What Our Taxes Support and How to Make Them Fairer
As the deadline for filing state and federal tax returns approaches, we have put together the following resources to help you understand what your tax dollars support. We also highlight reports and educational materials on closing tax loopholes and improving overall tax fairness.
The federal government collects taxes in order to finance various public services, including Social Security, national defense and health care services. As federal policymakers and citizens weigh key decisions about revenues and expenditures, it is instructive to examine what the federal government does with the money it collects. The chart below is from the Center on Budget and Policy Priorities.
Where Our Federal Tax Dollars Go, Center on Budget and Policy Priorities
Federal Income Taxes on Middle-Income Families Remain Near Historic Lows, Center on Budget and Policy Priorities
Federal Budget 101, National Priorities Project
Who Pays Taxes in America? Citizens for Tax Justice
President Obama's Tax Proposals in his Fiscal 2014 Budget Plan, Citizens for Tax Justice
President Obama’s Deficit-Reduction Package and Other Proposals in the 2014 Budget, Center on Budget and Policy Priorities
The Ryan Budget's Tax Cuts: Nearly $6 Trillion in Cost and No Plausible Way to Pay for It, Center on Budget and Policy Priorities
Pennsylvania Could Lose Billions Under Ryan Budget, Pennsylvania Budget and Policy Center
Ryan Roundup: Everything You Need to Know About Chairman Ryan's Budget, Center on Budget and Policy Priorities
What Sequestration Means for Pennsylvania, Pennsylvania Budget and Policy Center
Tax Expenditure Reform: An Essential Ingredient of Needed Deficit Reduction, Center on Budget and Policy Priorities
Two Critical Tax Credits for Working Families Are in Jeopardy, Pennsylvania Budget and Policy Center
Public investments by the Commonwealth of Pennsylvania educate our children, keep our communities safe, move people to work over roads and transit systems, and care for seniors, children and people with disabilities. More than 80 cents of every state General Fund dollar is spent on education, health and human services, or public safety. See the graphic to the left detailing General Fund spending in 2012-13.
PA Budget and Policy Center Resources
Corporate tax loopholes at the federal level allow corporations to shift foreign profits into accounts in Ireland, the Netherlands, Bermuda and other tax havens to avoid U.S. corporate taxes. These gimmicks are so well known they have nicknames — the Double Irish and the Dutch Sandwich — and they have a huge cost, as much as $90 billion a year.
Corporate tax loopholes are a problem at the state level, too. Large multi-state corporations like Wal-Mart and Home Depot use state tax loopholes to shift income earned in Pennsylvania to tax-haven states like Delaware, leaving little or no income on the books in the commonwealth. The Delaware Loophole alone costs Pennsylvania taxpayers $500 million a year.
State Tax Loopholes
$3 Billion for Corporate Tax Cuts in 2012-13, Pennsylvania Budget and Policy Center
Commentary: Pennsylvania Should Close Tax Loopholes, Pennsylvania Budget and Policy Center
Memo: Governor's Tax Cut Plan Falls Short of Reform, Pennsylvania Budget and Policy Center
Podcast: The Need for Real Tax Reform in Pennsylvania, Pennsylvania Budget and Policy Center
Corporate Tax Dodging In the Fifty States, Institute on Taxation and Economic Policy/Citizens for Tax Justice
A Majority of States Have Now Adopted a Key Corporate Tax Reform — "Combined Reporting," Center on Budget and Policy Priorities
Strengthening State Fiscal Policies for a Stronger Economy, Center on Budget and Policy Priorities
Federal Tax Loopholes
Ten (of Many) Reasons Why We Need Corporate Tax Reform, Citizens for Tax Justice
Working Paper on Tax Reform Options, Citizens for Tax Justice
Fortune 500 Corporations Holding $1.6 Trillion in Profits Offshore, Citizens for Tax Justice
Big No-Tax Corps Just Keep on Dodging, Citizens for Tax Justice
Representation Without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes, U.S. PIRG and Citizens for Tax Justice
A fair tax system asks citizens to contribute to the cost of government services based on their ability to pay. Pennsylvania's tax system performs poorly when it comes to tax fairness. The wealthy pay a small portion of their income in taxes, with a higher burden falling on lower- and middle-income families. As the table below shows, middle-income families in Pennsylvania pay more than double the share of their income in taxes than the very wealthiest families, while low-income families pay nearly three times as much.
The ITEP Guide to Fair State and Local Taxes, Institute on Taxation and Economic Policy
New Tax Laws in Effect in 2013 Have Modest Progressive Impact, Citizens for Tax Justice
Misconceptions and Realities About Who Pays Taxes, Center on Budget and Policy Priorities
Pennsylvania's Tax System Among the Most Regressive
Working families in Pennsylvania pay a far higher share of their income in state and local taxes than their wealthiest counterparts, according to a study by the Institute on Taxation and Economic Policy. Pennsylvania’s tax system scored so poorly that it made the list of the “Terrible 10” most regressive tax states in the nation, coming in eighth.
Federal Budget Resources, National Priorities Project
Federal Budget Resources, Center for American Progress
‘Tax Freedom Day’ Overstates Taxes Most Americans Pay, Pennsylvania Budget and Policy Center
What to Make of the Fiscal Cliff Deal, Pennsylvania Budget and Policy Center
The Bush Tax Cuts in Charts, Pennsylvania Budget and Policy Center/Center on Budget and Policy Priorities