Urban-Brookings Tax Policy Center

Policymakers should remember that oil price increases are usually followed by declines. In oil-dependent states, those downturns can quickly weaken revenues, jobs, and broader economic activity. In states without significant oil production, rising prices may prompt calls for gas tax holidays—but lawmakers would do well to instead focus on policies that strengthen families’ long-term economic security.

State and local tax revenues grew modestly in real terms in early fiscal year 2026, with overall gains driven largely by personal income taxes and concentrated in a small number of states with progressive tax structures that benefited from strong financial market performance in 2025. Many other states experienced flat or modest growth after adjusting for inflation.

16th Annual IRS/TPC Joint Research Conference on Tax Administration

Spending talks stall in the Senate.

Fewer data protection options will likely result in the Commerce Department agencies releasing less detailed public data, making these statistical products less useful for governments, businesses, researchers, and the public.

Trump imposes drone tariffs.

This quarter's report includes a special section on the rapid growth of prediction markets and the challenges they pose for state tax systems. The section examines the evolving federal regulatory framework, recent state tax and regulatory responses, and potential implications for state gambling tax revenues. More broadly, it highlights the growing challenge states face in adapting tax systems to emerging digital markets while protecting existing revenue bases.

Equity assessment is the practice of quantitatively estimating what a proposed policy will mean for outcomes people care about, especially for those who, due to the design of current and past structures, are worse off economically. This report offers a methodology for assessing how and to what extent a policy or policy proposal improves or diminishes fairness.