Tax Foundation: Not what it seems?
The other big player, the Tax Foundation, is a Washington, D.C.-based think tank that researches state and federal tax policies, and meets with lawmakers, citizens, and journalists to provide expert advice on tax policy. The group’s mission is to “improve lives through smarter tax policy,” according to the foundation’s website.
Smarter tax policy, the foundation argues, includes making the tax code easier for people to understand and creating rules that don’t penalize individuals or businesses for earning more money or profits, two things that create jobs and economic growth, the group claims.
Ted Boettner, executive director of the West Virginia Center on Budget & Policy, a member of the liberal State Priorities Partnership, which researches how tax policies affect lower income families, said most people don’t fully understand how much the Tax Foundation influences state tax laws.
West Virginia considered a bill this year that would have introduced a flat income tax of 2.5 percent, which would decrease further if certain triggers are met. The bill would have also increased the sales tax from 6 percent to 8 percent, including reinstating a tax on groceries, and increasing taxes on electronic cigarettes, beer and soft drinks, levies that disproportionately hurt the poor.
Boettner said the Tax Foundation’s research is marketed as balanced, but in the end advocates conservative policies that push tax cuts for the wealthy while raising them for lower-income families.
In February, both Boettner and Tax Foundation policy analyst Jared Walczak presented tax plans to the state’s Select Committee on Tax Reform at West Virginia’s Statehouse in Charleston. Boettner told lawmakers that a worker making $26,000 a year would pay $946 more, an 82 percent increase, under the tax bill, according to the Charleston Gazette-Mail. He urged lawmakers to keep the state’s earned-income-tax credit to soften the financial blow on lower income families.
Walczak called the West Virginia tax proposal “groundbreaking,” and that “sometimes a state needs to consider bolder moves,” the Gazette-Mail reported.
The Tax Foundation has pushed for what critics charge are wealthy-friendly tax policies in other states. The group’s analysts encouraged lawmakers in Maine to consider a flat tax, told Minnesota legislators they should repeal the state’s estate tax, and urged lawmakers in Nebraska to lower its top state income tax rate.
The policies are similar to those of the groups who fund the Tax Foundation. Nine out of the foundation’s top 10 nonprofit donors support numerous conservative and libertarian causes such as limited government and low taxes, and accounted for a total of $1.1 million in grants between 2010 and 2015, according to the Center for Public Integrity’s search of the latest available IRS tax documents. None of the Tax Foundation’s top donors were liberal groups or organizations that represent lower income groups.
The Charles Koch Foundation and its sister organization the Charles Koch Institute together were the Tax Foundation’s second-largest donor, giving $488,131 between 2012 and 2015, according to the Center’s investigation. The John Templeton Foundation gave $189,000 in 2014. Templeton supports many conservative causes such as the anti-tax group FreedomWorks and the Atlas Network, whose vision is to create “a world where limited governments defend the rule of law, private property and free markets.”
The Earhart Foundation, a large funder of conservative think tanks such as the American Enterprise Institute and the Atlas Network, gave $148,000 to the Tax Foundation from 2010 to 2013. And the Chase Foundation of Virginia, which funds right-wing political and free-market groups, gave $75,000 from 2010 to 2015, according to the Center’s analysis.
“I don’t know if you consider them nonpartisan,” said Derwood Chase Jr., president of the Chase Foundation of Virginia, when asked about the group’s financial support of the Tax Foundation. “I don’t always agree with some of their positions. We are supporting them for their information.”
The Templeton Foundation declined to comment for this story. The Koch and Earhart foundations and the Atlas Network did not return calls requesting comment.
John Buhl, media relations manager for the Tax Foundation, declined to discuss the foundation’s donors in detail, but said no one grantee contributes more than 12 percent of the group’s overall operating funding.
“We support a tax code that’s simpler, more transparent, more neutral and promotes economic growth,” Buhl said. “Some people say that characterizes us as center-right or conservative, but we think it’s something all Americans support.”
Others see it differently.
The Tax Foundation is one of the leading proponents of tax cuts that disproportionately favor the wealthy over low-income families, said Meg Wiehe, director of programs at the Institute on Taxation and Economic Policy, a liberal tax policy group that receives much of its financial support from the Ford Foundation, the left-leaning Bauman Foundation and Coydog Foundation, which supports Planned Parenthood.