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CLT UPDATE
Tuesday, March 17, 2015
Here they come, again!
Sixth assault for a Grad Tax is upon us
|
Know that old saying, the sixth time is the
charm?
Twenty years ago, the fifth effort to amend the
Massachusetts Constitution and change our income tax from flat to
graduated began like the previous four — with the Legislature
deciding to put the question before the voters....
Just months later, in November 1994, voters ...
defeated the graduated income tax initiative by more than 2-to-1, in
line with the four prior lopsided outcomes.
So, with those drubbings in mind, how to explain
the masochism on Beacon Hill, where there are rumblings of yet
another attempt? It’s because critics of a graduated tax are right:
It would make it easier for the Legislature to raise taxes when they
need to (hello, MBTA!). And that’s because it allows legislators to
ask more of those who can afford to pay more (hello, Bay State
millionaires!).
Then why have middle-class voters rejected the
efforts to bring Massachusetts into line with the way two-thirds of
the states and the federal government tax income?
First, chronic opponents have done a fine job
arguing that after “they” (that would be legislators with insatiable
appetites for raising taxes) come for the “rich,” they’re coming for
you. That’s the mantra of the state’s longtime anti-tax czarina, Barbara Anderson....
Abraham Lincoln presided over the introduction of
the first progressive income tax, which helped fund the Civil War. A
century and a half later, a fellow Republican, new governor Charlie
Baker, is certainly not on the same page as Honest Abe.
“Massachusetts needs to compete with many other states for jobs and
economic opportunity,” he recently told me. “For the most part,
states that are succeeding are states that operate in flat tax
environments. Period.”
Thing is, when you look at major competitor
states, like California, most of them have a graduated income tax,
and many are growing far faster than Massachusetts....
I wondered if Anderson would herself be
persuaded. Her response to a possible sixth attempt? “Add two more
sixes and you have the mark of the devil.... Are they starting with
the assumption that we’re dumber than we were the last five times?”
Let’s mark her down as undecided.
Stan Rosenberg, the new Senate president, seems
ready, recently telling me: “What it allows you to do is relieve
some of the pressure on people at lower- and middle-income levels.”
House Speaker Bob DeLeo, who was a yes last time, now appears
agnostic. Here’s betting he decides as he did before, though, since
his chosen Revenue Committee chairman, Jay Kaufman, supports the
move.
The Boston Globe (Magazine)
Saturday, March 14, 2015
Baker’s position on taxes is great for wealthy — and not many others
By Jim Braude
Cut spending or raise taxes? The most sensible
answer for the future of the Commonwealth is to do both. And there’s
a fair, politically safe way to bring in a significant amount of new
revenue.
Governor Charlie Baker says Massachusetts has a
spending problem, and it’s hard to disagree. Year-over-year spending
this fiscal year is on track to increase 7.7 percent, with one
multi-billion dollar line item, MassHealth, the state’s Medicaid
program, up 13 percent. As Baker tackles a $1.8 billion deficit, his
budget, released Wednesday, announces that a new era of fiscal
discipline is about to begin....
Baker has reflexively rejected the idea of new
revenue from new taxes or fees. But the problem with dogmatically
avoiding the concept of new taxes is that it will neuter
Massachusetts as an agent of economic change....
This plan amounts to a graduated income tax, and
would require a constitutional amendment — Massachusetts has a flat
income tax embedded in its constitution. The last time the concept
of a graduated income tax was presented to the voters was 1994, and
it lost decisively. But times have changed, and a proposal to
require the wealthiest Massachusetts residents to pay a fraction
more in state taxes would likely have broad appeal and come with
little political risk....
Some may argue that instituting a graduated
income tax is a slippery slope, and in time will reach the middle
class. That’s the primary reason that past graduated income tax
efforts have failed — they have been worded too broadly, and not
specifically targeted at top earners.
As Baker tries to restore some fiscal order, it’s
up to Democrats to make sure there’s funding to make long-term
investments in people and infrastructure. A Massachusetts
Millionaire Surtax is the surest way to get there.
The Boston Globe
Thursday, March 5, 2015
How to raise taxes — and get away with it
By George Donnelly
THE ARGUMENT: Should Massachusetts
consider adopting a graduated income tax?
YES
By Amanda Smith, Malden Democratic activist and member of
Progressive Massachusetts
If you ask most people, fairness is something
we value strongly. But our income tax system here in
Massachusetts is incredibly unfair, and it fails to generate
adequate revenue to fund important public services that make
Massachusetts a place where businesses thrive and people want to
live.
We have a flat tax system, which our state
Constitution mandates. By taxing everyone at the same rate, a
flat tax overly burdens low and middle income families while
taxing the very wealthy the least....
I support proposals by several Massachusetts
legislators to adopt a progressive taxation system. The flat tax
is an outmoded model for a modern economy, and it’s holding us
back.
We’ve neglected our schools and infrastructure for decades and
the evidence of that neglect is everywhere: decaying bridges
that have to be closed, roads that are falling apart, subway
tracks and trains that are becoming dangerous, schools that are
crying out for updates and expansion. If we want young people
and families to stay here — if we want businesses to invest here
— then we must invest in our communities. But that investment
should not be made disproportionately on the backs of low and
middle income families who are barely hanging on financially in
this very difficult economy.
Adopting a progressive taxation system would
enable us to make the needed investments in our state, and to do
so in the fairest way possible.
NO
By Ted Tripp, president of the North Andover Taxpayers
Association
When I first heard that state Senator James
Eldridge (D, Acton) filed legislation to amend the state
Constitution to allow for a graduated income tax, I immediately
thought of President Ronald Reagan’s famous quote: “There you go
again.” The tax-and-spend crowd on Beacon Hill never seems to
get tired of making us poorer as they pursue the Holy Grail of a
graduated income tax. Once achieved, this is supposed to solve
all of our problems. Just look how well this has worked at the
federal level.
Adoption of a graduated income tax has been
on the ballot five times (1962, 1968, 1972, 1976, and 1994), and
each time the voters have defeated it by approximately 70
percent to 30 percent. In 1994, the opposition was led by
Barbara Anderson and Citizens for Limited Taxation with the
slogan “It’s a Tax Trap.” The trap is that if the graduated tax
passes, first they will come after the rich, then the near rich,
then the almost rich, then eventually the middle class where the
real money is. We will all end up paying more because the
purpose of the change in law is to raise unlimited amounts of
money....
We already have the fifth highest per capita
tax burden of any state in the country. Maybe Senator Eldridge
would like to make us number one, but I think he would have a
hard time convincing the voters that this is a prudent thing to
do.
The Boston Globe
Metro-North edition
Sunday, February 8, 2015
Should Massachusetts consider adopting a graduated income tax?
THE ARGUMENT: Should Massachusetts
consider adopting a graduated income tax?
YES
By State Senator James Eldridge, an Acton Democrat
Last week, I filed a constitutional amendment
to create a graduated, or progressive income tax that would
allow us to invest in our communities to ensure a quality public
education for every child in Massachusetts, improve our
transportation infrastructure, provide police and fire
protection to keep our neighborhoods safe, and enhance public
and individual health....
In 2013, the Massachusetts Legislature
established the Tax Fairness Commission, a 15-member bipartisan
commission, which concluded the following in its report: The
overall tax system in Massachusetts is regressive, meaning
middle and low-income taxpayers pay a larger share of their
income in taxes than high income taxpayers.”
A progressive income tax would change this
reality by empowering the public to create a fairer tax system
that would reduce the tax burden on most working class and
middle class families, while raising sufficient revenue to make
the key investments in our communities that are long overdue.
NO
By Michael Widmer, president of the Mass Taxpayers Foundation
Massachusetts already has a progressive
income tax so my opposition to a constitutional amendment to
institute a graduated income tax is not about progressivity.
Rather, it is because the proposal would result in a greater tax
burden on middle and higher income taxpayers and give the
legislature open-ended authority to set rates as high as they
wish indefinitely into the future....
Furthermore, a constitutional amendment is
open-ended and gives the legislature enormous latitude. At any
time and without voter input, the legislature would have carte
blanche to increase rates and apply them to whatever income
levels it chooses. For example, the Minnesota legislature
adopted a top rate of 9.85 percent in 2013. This uncertainty and
unpredictability would pose yet another barrier to recruiting
and retaining talented workers.
Economic inequality is a serious national
problem. However, the factors driving this trend are deep-rooted
and not solved through tax policy. A graduated income tax would
have a limited, if any, impact in addressing this problem.
The Boston Globe
Metro-West edition
Sunday, January 25, 2015
Should the state adopt a graduated income tax?
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Chip Ford's CLT
Commentary
Here they come again, folks, for a sixth
shot at a state graduated income tax.
Voters have resoundingly rejected this
death wish every time it's been on the ballot, so I must ask:
What part of "No" don't the tax-borrow-and-spenders understand?
If you were around for the last attempt (1994)
you'll probably remember Jim Braude, author of the first column
("Baker’s position on taxes is great for wealthy — and not many
others"). At that time he was executive director of TEAM (Tax
Equity Alliance of Massachusetts), which we taxpayers instead
referred to back then as "Tax Everything And More." He was
imported from out-of-state to take on Barbara Anderson and CLT.
Braude led the charge to enshrine the divide-and-conquer amendment
to our state Constitution — was
Barbara's opponent in countless debates across the state.
In George Donnelly's column ("How to raise taxes
— and get away with it"), the Boston Globe columnist recommended
that rather than again going for a direct graduated income tax,
instead Bacon Hill Democrats adopt a "Massachusetts Millionaire
Surtax". But until that's at least filed as a bill — as the
Grad Tax has been — it's only an idea. And right now it's only
his idea. If someone takes it up and actually files a
bill proposing it, we'll dig into that then.
Offhand, his idea to tax "only the rich" brings
to mind the federal Alternative Minimum Tax. When it was
imposed in 1969, the AMT was intended to tax a mere 155 of "the
rich" who earned $200,000 or more but managed to avoid paying any
federal taxes — but it wasn't indexed for in inflation. ($200,000 in
1969 dollars is equal to $1.274 million today.) Before long the
not-so-rich, then the upper-middle class were paying it.
Regardless, right now the threat is of a
divide-and-conquer-one-bracket-at-a-time Graduated Income Tax —
again.
One opposition writer, Ted Tripp, president of
the North Andover Taxpayers Association, is a longtime CLT member
and star activist.
What do the tax-borrow-and-spend "progressives"
find unfair with the historic, constitutionally ensconced flat tax?
How does everyone paying the same rate "favor the rich" — if
everyone's paying the same tax rate, regardless of the amount of
income? (5.15% of $50,000 = $2,575: 5.15% of $1,000,000
= $51,500) What could be more fair than that?
It makes me wonder how many of those
"progressives" who think there's not enough revenue coming in have
ever chosen to take advantage of
CLT's
Voluntary Tax Check-Off (Line 22 on DOR Form 1) when filing
their personal income tax returns? We know from over a decade
of experience, amazingly few.
All this reminds me of the old ditty attributed
to U.S. Senator Russell B. Long (D-Louisiana):
"Don’t tax you. Don’t tax me. Tax the guy behind
the tree."
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Chip Ford |
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The Boston Globe (Magazine)
Saturday, March 14, 2015
PERSPECTIVE
Baker’s position on taxes is great for wealthy — and not many others
Like Abraham Lincoln a century and a half ago, Charlie Baker should
help lead the reform from a flat income tax to a progressive one.
By Jim Braude
Know that old saying, the sixth time is the charm?
Twenty years ago, the fifth effort to amend the Massachusetts
Constitution and change our income tax from flat to graduated began
like the previous four — with the Legislature deciding to put the
question before the voters. Despite the result, I chased down a
senator from Lynn who had voted no after having voted yes in the
past. “Why switch? Because we took your vote for granted?” I asked
him. “No, Jim,” the late Walter Boverini responded. “Now that I’m
not running for reelection, I can finally vote my conscience!”
Just months later, in November 1994, voters apparently didn’t need
to wait for retirement to channel the spirit of Boverini. They
defeated the graduated income tax initiative by more than 2-to-1, in
line with the four prior lopsided outcomes.
So, with those drubbings in mind, how to explain the masochism on
Beacon Hill, where there are rumblings of yet another attempt? It’s
because critics of a graduated tax are right: It would make it
easier for the Legislature to raise taxes when they need to (hello,
MBTA!). And that’s because it allows legislators to ask more of
those who can afford to pay more (hello, Bay State millionaires!).
Then why have middle-class voters rejected the efforts to bring
Massachusetts into line with the way two-thirds of the states and
the federal government tax income?
First, chronic opponents have done a fine job arguing that after
“they” (that would be legislators with insatiable appetites for
raising taxes) come for the “rich,” they’re coming for you. That’s
the mantra of the state’s longtime anti-tax czarina, Barbara
Anderson.
Another reason is that while rank-and-file Democrats have repeatedly
embraced the change (ol’ Walter notwithstanding), Democratic leaders
have been less enthusiastic. Case in point: Only after he was
threatened with a disruption of the Democratic State Convention in
1994 did Senate President Bill Bulger agree to allow a vote in the
Constitutional Convention. (I know, because I was one of the people
who did the threatening.)
Abraham Lincoln presided over the introduction of the first
progressive income tax, which helped fund the Civil War. A century
and a half later, a fellow Republican, new governor Charlie Baker,
is certainly not on the same page as Honest Abe. “Massachusetts
needs to compete with many other states for jobs and economic
opportunity,” he recently told me. “For the most part, states that
are succeeding are states that operate in flat tax environments.
Period.”
Thing is, when you look at major competitor states, like California,
most of them have a graduated income tax, and many are growing far
faster than Massachusetts.
Baker should lead the reform, either because he believes in equity
(use it to lower property taxes, a promise his predecessor made but
couldn’t pull off) or because some day he may choose to eschew his
read-my-lips stance. So far, he’s sticking with his recent
pronouncement: “We need to start from the premise the taxpayers have
been taxed enough.”
That’s true: Most have been. In fact, many in Massachusetts have
been taxed more than enough. Those in the lowest 20 percent of
personal income pay more than twice as high a share to state and
local taxes than those in the top 1 percent, according to the
Institute for Taxation and Economic Policy. Add in the state’s
growing reliance on take-from-the-poor and give-to-everyone-else
gambling revenue, and you have fertile territory for change.
And there’s another reason. Standard & Poor’s, hardly a left-wing
think tank, is on board: With “rising income inequality, the move
toward more progressive tax rates may help states generate faster
tax revenue growth than would flatter tax regimes.’’
I wondered if Anderson would herself be persuaded. Her response to a
possible sixth attempt? “Add two more sixes and you have the mark of
the devil.... Are they starting with the assumption that we’re
dumber than we were the last five times?” Let’s mark her down as
undecided.
Stan Rosenberg, the new Senate president, seems ready, recently
telling me: “What it allows you to do is relieve some of the
pressure on people at lower- and middle-income levels.” House
Speaker Bob DeLeo, who was a yes last time, now appears agnostic.
Here’s betting he decides as he did before, though, since his chosen
Revenue Committee chairman, Jay Kaufman, supports the move.
Even if the two Democratic leaders ensure the question makes it to
the ballot, it will likely be 0-6 unless Baker and his huge bully
pulpit leads the counter-intuitive charge. Only anti-communist
Richard Nixon could go to China. Maybe only no-new-taxes Charlie
Baker could spearhead this kind of tax revolution.
Jim Braude is host of “Greater Boston” on WGBH
and co-host of WGBH’s “Boston Public Radio” on 89.7 FM.
The Boston Globe
Thursday, March 5, 2015
How to raise taxes — and get away with it
By George Donnelly
Cut spending or raise taxes? The most sensible answer for the future
of the Commonwealth is to do both. And there’s a fair, politically
safe way to bring in a significant amount of new revenue.
Governor Charlie Baker says Massachusetts has a spending problem,
and it’s hard to disagree. Year-over-year spending this fiscal year
is on track to increase 7.7 percent, with one multi-billion dollar
line item, MassHealth, the state’s Medicaid program, up 13 percent.
As Baker tackles a $1.8 billion deficit, his budget, released
Wednesday, announces that a new era of fiscal discipline is about to
begin.
Yet it’s also fair to say that Massachusetts has a revenue problem.
That’s because the state budget will automatically grow by about $1
billion on its own, without any new discretionary spending, because
of swelling fixed costs. MassHealth cost increases alone are
expected to absorb about one-third of revenue growth anticipated in
the next fiscal year.
Baker has reflexively rejected the idea of new revenue from new
taxes or fees. But the problem with dogmatically avoiding the
concept of new taxes is that it will neuter Massachusetts as an
agent of economic change. As a regional economy that competes with
many others, Massachusetts must be a force that can invest in a
vision for long-term prosperity. If we only scrape by year to year,
state government will effectively become a pass-through vehicle for
providing health care, distributing state aid, and paying state
workers’ pensions. Additional educational investment, the key to
growing the economy, will be minimal. Public transportation
infrastructure will continue to deteriorate.
Yet there is a fair and politically foolproof way of raising taxes
to make targeted investments for the future. Massachusetts has been
minting millionaire households for years. The Boston Business
Journal reported last month that in 2012, the last year figures were
available, about 13,700 households in the state reported at least $1
million in taxable income, up from 10,253 in 2010. The average
income of these millionaire filers, according to the Department of
Revenue, was $3.52 million.
Much of the new wealth stems from our ecosystem of intellectual
capital that has created world-leading companies. The salaries can
be sizable. And owning even a tiny piece of a growing company,
through stock options, can bring outsized rewards.
As the income gap grows wider, Massachusetts can shave just a tiny
fraction of tax revenue from its top earners. Let’s call it the
Massachusetts Millionaire Surtax. Households earning over $1 million
would pay an additional 1 percentage point in state taxes for every
dollar they make over $1 million. So, for the first $1 million in
taxable income, million-dollar earners pay the same as everybody
else — 5.15 percent. If a household earns $1.5 million, then the
taxpayer owes a 1 percent surcharge on the additional $500,000 —
$5,000 in extra state taxes.
The surtax would have yielded about $340 million in new revenue in
2012. Given trends in the economy since 2012, that number would
probably be north of $400 million in 2015. That’s enough fresh
funding to make strategic investments, like targeting transportation
infrastructure needs and focusing on early childhood education.
Simple, right? Not quite. This plan amounts to a graduated income
tax, and would require a constitutional amendment — Massachusetts
has a flat income tax embedded in its constitution. The last time
the concept of a graduated income tax was presented to the voters
was 1994, and it lost decisively. But times have changed, and a
proposal to require the wealthiest Massachusetts residents to pay a
fraction more in state taxes would likely have broad appeal and come
with little political risk.
Setting a top income tax rate of 6.15 is hardly an uncompetitive
move. Million-dollar earners in California pay a state tax rate of
13.3 percent. New York’s top state tax rate is 8.82 percent.
Some may argue that instituting a graduated income tax is a slippery
slope, and in time will reach the middle class. That’s the primary
reason that past graduated income tax efforts have failed — they
have been worded too broadly, and not specifically targeted at top
earners.
As Baker tries to restore some fiscal order, it’s up to Democrats to
make sure there’s funding to make long-term investments in people
and infrastructure. A Massachusetts Millionaire Surtax is the surest
way to get there.
George Donnelly is the former editor the Boston Business Journal.
The Boston Globe
Metro-North edition
Sunday, February 8, 2015
Should Massachusetts consider adopting a graduated income tax?
THE ARGUMENT
Should Massachusetts consider adopting a graduated income tax?
YES
By Amanda Smith, Malden Democratic activist and member of
Progressive Massachusetts
If you ask most people, fairness is something we value strongly. But
our income tax system here in Massachusetts is incredibly unfair,
and it fails to generate adequate revenue to fund important public
services that make Massachusetts a place where businesses thrive and
people want to live.
We have a flat tax system, which our state Constitution mandates. By
taxing everyone at the same rate, a flat tax overly burdens low and
middle income families while taxing the very wealthy the least. A
family making $30,000 or $100,000 is taxed at the same rate as a
family making $1 million or $10 million. So the responsibility of
funding public services falls disproportionately on those who are
the most strapped financially — especially in a high cost of living
state like ours — while those who’ve been doing very well for
decades avoid paying their fair share.
According to a recent survey by WalletHub, Americans overwhelmingly
reject the idea of a flat tax and instead favor progressive
taxation, where people pay income taxes in accordance with their
ability to pay. In such a system, the wealthiest families pay a
higher percentage than low and middle income families. It makes
complete sense to me: low and middle income families have less
income to contribute, while the wealthiest are more able to pay and
arguably have benefited the most from our stable system of
government and community infrastructure.
I support proposals by several Massachusetts legislators to adopt a
progressive taxation system. The flat tax is an outmoded model for a
modern economy, and it’s holding us back.
We’ve neglected our schools and infrastructure for decades and the
evidence of that neglect is everywhere: decaying bridges that have
to be closed, roads that are falling apart, subway tracks and trains
that are becoming dangerous, schools that are crying out for updates
and expansion. If we want young people and families to stay here —
if we want businesses to invest here — then we must invest in our
communities. But that investment should not be made
disproportionately on the backs of low and middle income families
who are barely hanging on financially in this very difficult
economy.
Adopting a progressive taxation system would enable us to make the
needed investments in our state, and to do so in the fairest way
possible.
NO
By Ted Tripp, president of the North Andover Taxpayers Association
When I first heard that state Senator James Eldridge (D, Acton)
filed legislation to amend the state Constitution to allow for a
graduated income tax, I immediately thought of President Ronald
Reagan’s famous quote: “There you go again.” The tax-and-spend crowd
on Beacon Hill never seems to get tired of making us poorer as they
pursue the Holy Grail of a graduated income tax. Once achieved, this
is supposed to solve all of our problems. Just look how well this
has worked at the federal level.
Adoption of a graduated income tax has been on the ballot five times
(1962, 1968, 1972, 1976, and 1994), and each time the voters have
defeated it by approximately 70 percent to 30 percent. In 1994, the
opposition was led by Barbara Anderson and Citizens for Limited
Taxation with the slogan “It’s a Tax Trap.” The trap is that if the
graduated tax passes, first they will come after the rich, then the
near rich, then the almost rich, then eventually the middle class
where the real money is. We will all end up paying more because the
purpose of the change in law is to raise unlimited amounts of money.
In 1994 when the tax was last on the ballot, only 30 of the 351
Massachusetts communities voted for it. None were in Essex or
Middlesex Counties.
We already have the fifth highest per capita tax burden of any state
in the country. Maybe Senator Eldridge would like to make us number
one, but I think he would have a hard time convincing the voters
that this is a prudent thing to do.
Perhaps the Beacon Hill politicians should be devoting their energy
to reducing the $1.9 billion spent on illegal immigrants every
years, or finding out why the Reason Foundation says our highway
administrative repair costs are seven times the national average, or
trying to get MassHealth costs under control so we don’t have a
$700+ million budget shortfall. The difference is that these efforts
require real work and critical thinking with tough decisions. For
some, however, it’s just so much easier to sit back in a nice
leather chair in a plush office and file a bill to raise taxes.
I mentioned the Reagan quote early on. Another one comes to mind as
I close: Einstein’s definition of “Insanity: doing the same thing
over and over again and expecting different results.”
The Boston Globe
Metro-West edition
Sunday, January 25, 2015
Should the state adopt a graduated income tax?
THE ARGUMENT
Should the state adopt a graduated income tax?
YES
By State Senator James Eldridge, an Acton Democrat
Last week, I filed a constitutional amendment to create a graduated,
or progressive income tax that would allow us to invest in our
communities to ensure a quality public education for every child in
Massachusetts, improve our transportation infrastructure, provide
police and fire protection to keep our neighborhoods safe, and
enhance public and individual health.
Unfortunately, our current tax system is not doing that. Local aid
has been cut 40 percent compared to a decade ago, our state has
hundreds of roads and bridges in disrepair while our public
transportation system ages, many police and fire departments have
laid off staff, and hospitals and medical clinics continue to close
across the state.
Meanwhile, for 20 years state government has increased taxes on
working families while cutting taxes on corporations, banks, and the
wealthy. This approach is not working for most families in
Massachusetts. Two decades after the progressive income tax was last
considered, it’s time to have a full discussion on the proposal.
Currently, our Massachusetts Constitution only allows a flat income
tax. This is how a flat tax is unfair to working families: on Jan.
1, an automatic tax cut went into effect, reducing the state income
tax from 5.2 percent to 5.15 percent. According to the Massachusetts
Budget and Policy Center, this tax cut will result in a tax cut of
about $19 for households earning approximately $58,000 a year; those
earning around $168,000 will get a tax cut of roughly $66; and
someone in the top 1 percent earning about $2.4 million will see a
tax savings of approximately $936.
In 2013, the Massachusetts Legislature established the Tax Fairness
Commission, a 15-member bipartisan commission, which concluded the
following in its report: The overall tax system in Massachusetts is
regressive, meaning middle and low-income taxpayers pay a larger
share of their income in taxes than high income taxpayers.”
A progressive income tax would change this reality by empowering the
public to create a fairer tax system that would reduce the tax
burden on most working class and middle class families, while
raising sufficient revenue to make the key investments in our
communities that are long overdue.
NO
By Michael Widmer, a Belmont resident, is president of the Mass
Taxpayers Foundation
Massachusetts already has a progressive income tax so my opposition
to a constitutional amendment to institute a graduated income tax is
not about progressivity. Rather, it is because the proposal would
result in a greater tax burden on middle and higher income taxpayers
and give the legislature open-ended authority to set rates as high
as they wish indefinitely into the future.
According to the state’s Department of Revenue, for taxpayers in the
lowest income quintile, 0.61 percent of their total income goes to
the state income tax. By comparison, it consumes 3.6 percent of
total income for the middle quintile of taxpayers—those with
adjusted gross incomes between $25,200 and $47,710. For the top
quintile, the state income tax consumes 4.75 percent of total
income. Furthermore, the bottom three quintiles of tax filers
contribute 12 percent to total state income tax revenues, while the
top quintile contribute nearly 70 percent.
Adding to the tax burden of middle and higher income taxpayers,
including businesses that pay personal income taxes, would pose one
more disincentive to job creation in Massachusetts. These taxpayers,
individually and collectively, are the ones who make decisions
whether to invest, locate, consolidate, or expand here. And these
are the taxpayers whose skills are critical for the future of the
state’s economy.
Massachusetts’s high costs for businesses and individuals are one of
the factors that has resulted in anemic job growth averaging 0.1
percent per year since 2001. The state has lost middle class
manufacturing jobs at almost twice the U.S. rate over the past 35
years.
Furthermore, a constitutional amendment is open-ended and gives the
legislature enormous latitude. At any time and without voter input,
the legislature would have carte blanche to increase rates and apply
them to whatever income levels it chooses. For example, the
Minnesota legislature adopted a top rate of 9.85 percent in 2013.
This uncertainty and unpredictability would pose yet another barrier
to recruiting and retaining talented workers.
Economic inequality is a serious national problem. However, the
factors driving this trend are deep-rooted and not solved through
tax policy. A graduated income tax would have a limited, if any,
impact in addressing this problem.
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