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CLT UPDATE
Wednesday, April 29, 2015
Threat of "Divide-and-Conquer"
Grad Tax intensifies
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Massachusetts’ flat state income tax is destined
to become a major political issue this year as a prominent coalition
of advocacy groups launches a ballot petition to raise taxes on the
wealthiest Bay State households.
The tentative plan is to target the 1 percent of
earners: incomes over $500,000.
Raise Up
Massachusetts, a coalition of community groups, labor unions,
and religious organizations, is working out the details of a ballot
petition that it plans to submit by August to the Attorney General
for approval. But the soonest the ballot question would go to the
voters is 2018 because of the complications in establishing a
graduated income tax, which involves amending the state
constitution.
Raise Up was behind the paid sick time
initiative, Question 4, that passed last fall. If Raise Up succeeds,
it would spell the end of Massachusetts’ one-size-fits all income
tax. The current state income tax rate is 5.15 percent regardless of
income....
The politics of the campaign promise to be
tricky. Massachusetts voters have historically hated the idea of a
graduated state income taxes, last defeating a ballot question
severely by a 2-to-1 margin in 1994. That’s because voters sensed a
graduated tax ultimately would reach their wallets and pocketbooks.
Massachusetts is among seven states with a flat rate.
But given the growing income gap, the theme of
income equality rising as a top domestic issue, and a burgeoning
millionaire class in Massachusetts, the politics of taxing the rich
could play well here. The challenge is defining “the rich” in a
politically foolproof way.
In light of the state budget shortfalls, last
month
I suggested in a Boston Globe op-ed that a surtax tax on
millionaires – there are 13,700 of them in the Commonwealth – would
likely pass muster with voters. My basic point was the Commonwealth
needs to raise more revenue, and it shouldn’t pretend otherwise (and
millionaires could afford it). But my modest proposal would only
raise about $340 million. Raise Up Massachusetts has bigger
ambitions, and it has the resources to push its agenda forward.
MassterList
Monday, April 27, 2015
Ballot petition in the works to target 1 percent with higher taxes
By George Donnelly
Constitutional amendments have not generated much
interest from lawmakers since the historic debates over gay
marriage, but lawmakers continue to file proposals.
Committees faced a Wednesday deadline to render
judgments on amendments filed for consideration during a potential
Constitutional Convention this year. Bills that do not receive a
committee report will automatically be reported as
ought-not-to-pass, Senate Clerk Bill Welch told the News Service.
The Judiciary Committee plans to conduct an email
poll on its amendments before the deadline....
Once bills have been reported out members can
place them on the calendar of the first constitutional convention
— a joint session of the House and
Senate where Senate President Stanley Rosenberg will preside.
State House News Service
Advances: Week of April 26, 2015
Constitutional Amendment Deadline
The average single family tax bill in
Massachusetts in fiscal year 2015 was $5,225, a 3.6 percent jump
from the previous year, according to the state’s Department of
Revenue. This growth follows a longer trend: property taxes have
increased over each of the past 10 years....
A single family property tax bill is
influenced by factors both in and out of the home. A renovation
or expansion can increase a tax bill. And growth within the
municipality — both residential and commercial — plays a role,
too. Single family tax bills change relative to the rest of the
municipality.
In some communities, growth in the annual tax
bill can also be attributed to local ballot initiatives that
give the municipality permission to hike property taxes to fund
public schools, infrastructure improvements, or other municipal
expenses. These voter-approved exclusions push communities’
year-to-year tax increase
beyond the limits set by Proposition 2½.
The Boston Globe
Wednesday, March 25, 2015
Property tax bills on the rise throughout Mass.
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Chip Ford's CLT
Commentary
I warned last month that the Gimme Lobby is
gearing up for the sixth attempt to impose a graduated income
tax on the taxpayers of Massachusetts. For the sixth time the
tax-borrow-and-spend cabal is scheming to amend the state
constitution to make hiking taxes easier, one tax bracket at a time.
If the constitution is ever so amended it will be forever, and
defeating any tax increase on one targeted bracket at a time will be
impossible forevermore. (CLT Update. Mar. 17 - "Here
they come, again! Sixth assault for a Grad Tax is upon us")
I asked:
"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?"
This is not about "fairness"
— it's about easier access to more
of every taxpayer's money on a whim. Sure, today they'll
claim they're only going after the "richest 1%" to pitch their
scheme to voters, but that's not where the real money is.
There are 13,700 millionaires living among approximately 1.8
million tax filers of Massachusetts. How long will hiking
the income tax on "the richest 1 percent" alone satisfy
their insatiable spending lust? You can bet however they
word their proposed constitutional amendment they will leave
room to inevitably maneuver on to all taxpayers.
Why else would they bother —
especially if the wealthy begin to bail out of Massachusetts as
they have in other high-tax states?
With Sen. Stanley Rosenberg (D-Amherst) as the
new Senate President presiding over the upcoming constitutional
convention, it will bear watching. Sen. Rosenberg has been a
longtime advocate for a graduated income tax, and a bill for such a
legislative amendment has been
filed by state Sen
James Eldridge
(D-Acton). With Senate President Rosenberg wielding the convention
gavel a Grad Tax may soon be before us.
According to the state Department of Revenue,
property taxes on average statewide have increased 3.6 percent over
the past year. Granted that much of that increase is due to
local voters electing to tax themselves and their neighbors more
through municipal overrides and debt exclusions to exceed the limits
of Proposition 2½. Nonetheless, the cost
of government at all levels — federal, state, and local — just keeps
growing and growing year after year.
In
the last CLT Update, Apr. 24 ("FY2016
"austere" House budget proposes 'only' $1B spending increase," I
noted:
According to the US
Inflation Calculator:
"The latest inflation rate for the United States
is -0.1% through the 12 months ended March 2015
as published by the US government on April 17,
2015."
For whatever that's worth — anyone
who shops, pays bills, recognizes that the
official government Consumer Price Index is a
hoax.
Then there's the drop of median household income,
still below pre-recession level. According to Sentier
Research's "Household
Income Trends" (issued last month):
Real median
annual household income in January 2015 can be put into
broader perspective by comparisons with previous levels
of household income since the recession began and dating
back to the start of the last decade. The January 2015
median income of $54,332 was 1.0 percent lower than the
median of $54,873 in June 2009, the end of the recent
recession and beginning of the “economic recovery.”
(Since the recession ended consumer prices have
increased by 9.3 percent, creating a sizable “headwind”
for changes in median annual household income.) The
January 2015 median was 2.8 percent lower than the
median of $55,896 in December 2007, the beginning month
of the recession that occurred more than seven years
ago. And the January 2015 median was 3.9 percent lower
than the median of $56,561 in January 2000, the
beginning of this statistical series. These comparisons
demonstrate that despite recent increases in real median
annual household income, a significant amount of ground
needs to be recovered to return to a median income level
that existed before the occurrence of the recent
recession and even at the turn of the last century.
Since "economic recovery" from the Great
Recession allegedly began in 2009, median household income is
down or stagnant even as consumer prices have risen by 9.3
percent. We are making less and spending more just to get
by day to day. But recessions and hardships do not affect
governments at any level. Governments just demand more to
spend more, simply impose higher taxes and take it.
The state is proposing to spend an additional
billion dollars in FY2016 over current spending. Local
property taxes statewide on average are up 3.6 percent over the past
year. The tax-borrow-and-spend cabal wants a Graduated Income
Tax to grab even more from taxpayers to spend on its own interests.
More Is Never Enough (MINE) and never will be
— until they have it all, or are stopped. This cannot
go on forever
— in fact, it can't go on for much longer. Our money is
running out, as is time.
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Chip Ford |
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MassterList
Monday, April 27, 2015
Ballot petition in the works to target 1 percent with higher taxes
By George Donnelly
Massachusetts’ flat state income tax is destined to become a major
political issue this year as a prominent coalition of advocacy
groups launches a ballot petition to raise taxes on the wealthiest
Bay State households.
The tentative plan is to target the 1 percent of earners: incomes
over $500,000.
Raise Up
Massachusetts, a coalition of community groups, labor unions,
and religious organizations, is working out the details of a ballot
petition that it plans to submit by August to the Attorney General
for approval. But the soonest the ballot question would go to the
voters is 2018 because of the complications in establishing a
graduated income tax, which involves amending the state
constitution.
Raise Up was behind the paid sick time initiative, Question 4, that
passed last fall. If Raise Up succeeds, it would spell the end of
Massachusetts’ one-size-fits all income tax. The current state
income tax rate is 5.15 percent regardless of income.
Raise Up conducted polling in January that showed strong support –
upwards of 70 percent – for significant tax increases on incomes
over $500,000. According to one person familiar with the polling
data, an income of $500,000 and above resonated in polls as
“wealthy” – and a level that should be taxed at a higher rate.
“Polling and focus groups have opened a new horizon about how
strongly people feel about that $500,000 level,” said one of the
organizers. Raise Up expects to be on the streets collecting
signatures in the fall.
Raise Up is considering an aggressive target for revenue from a new
tax rate for top earners – upwards of $2 billion a year, which the
coalition believes would result from raising the rate to 9 percent
on incomes over $500,000. Raise Up used the 9 percent rate in its
polling – so that marginal rate, which would begin at the $500,000
level, tested well. But the group is still debating the income level
and tax rate for the petition – nothing is settled yet, a source
said.
Changing the Commonwealth’s flat income tax is a complicated matter
because it’s written into the state constitution. A constitutional
amendment requires a multistep process that involves the Legislature
and more than one legislative session. In short, a fall 2015
signature drive would set in motion a process for a 2018 ballot
question.
There are other complications – notably, drafting the petition so a
move to a graduated income tax through a constitutional amendment
stands the test of time. For example, a $500,000 income places the
household not quite in the 1 percent of earners in Massachusetts
(one percent of Bay Staters actually earn $532,000 or higher);
rampant inflation, while not a factor in our current economy, could
return; and in 10 years $500,000 could be worth $150,000 in today’s
dollars, so the petitioners need to weigh an inflation rider.
A cautionary tale is the Alternative Minimum Tax, originally a
reaction in 1969 to a tiny fraction of high earners who avoided
taxes through deductions. Now it affects millions of taxpayers,
although it finally was indexed to inflation in 2012.
The politics of the campaign promise to be tricky. Massachusetts
voters have historically hated the idea of a graduated state income
taxes, last defeating a ballot question severely by a 2-to-1 margin
in 1994. That’s because voters sensed a graduated tax ultimately
would reach their wallets and pocketbooks. Massachusetts is among
seven states with a flat rate.
But given the growing income gap, the theme of income equality
rising as a top domestic issue, and a burgeoning millionaire class
in Massachusetts, the politics of taxing the rich could play well
here. The challenge is defining “the rich” in a politically
foolproof way.
In light of the state budget shortfalls, last month
I suggested in a Boston Globe op-ed that a surtax tax on
millionaires – there are 13,700 of them in the Commonwealth – would
likely pass muster with voters. My basic point was the Commonwealth
needs to raise more revenue, and it shouldn’t pretend otherwise (and
millionaires could afford it). But my modest proposal would only
raise about $340 million. Raise Up Massachusetts has bigger
ambitions, and it has the resources to push its agenda forward.
State House News Service
Advances: Week of April 26, 2015
Constitutional Amendment Deadline
Constitutional amendments have not generated much interest from
lawmakers since the historic debates over gay marriage, but
lawmakers continue to file proposals.
Committees faced a Wednesday deadline to render judgments on
amendments filed for consideration during a potential Constitutional
Convention this year. Bills that do not receive a committee report
will automatically be reported as ought-not-to-pass, Senate Clerk
Bill Welch told the News Service.
The Judiciary Committee plans to conduct an email poll on its
amendments before the deadline.
Once bills have been reported out members can place them on the
calendar of the first constitutional convention
— a joint session of the House and
Senate where Senate President Stanley Rosenberg will preside.
In order for amendments to be taken up for debate at the convention,
they must be placed on the calendar before May 13. The two branches
are required to select a time and date of the first constitutional
convention for no later than May 13.
Initiative petitions to the constitution could come up later in the
two-year session, and the convention generally recesses and then
returns at various points during the two years.
Last session, no amendments were passed.
On their way toward changing the state's founding document drafted
by John Adams, amendments must first be ordered to a third reading
by a majority of the members present. If they make it out of the
House and Senate Bills on Third Reading committees acting jointly,
the amendments must receive approval by a majority of members
elected to then be taken up by the next general court, in 2017-2018.
There are 40 senators and 160 members of the House. If it then
clears the next General Court, the amendment would go to voters.
The Boston Globe
Wednesday, March 25, 2015
Property tax bills on the rise throughout Mass.
Average single family tax bill in the state grew 3.6 percent from
the last fiscal year
By Catherine Cloutier
Prospective home buyers may have another financial hurdle to
consider this spring: Family property tax bills are on the upswing
throughout the Commonwealth.
The average single family tax bill in Massachusetts in fiscal year
2015 was $5,225, a 3.6 percent jump from the previous year,
according to the state’s Department of Revenue. This growth follows
a longer trend: property taxes have increased over each of the past
10 years.
While the cost of property taxes varies by community across
Massachusetts, growth in the average bill has been widespread.
Between fiscal years 2014 and 2015, the average family property tax
bill increased in 304 of the 326 cities and towns for which data
were available.
Among the towns and cities that saw growth were many of the more
highly taxed ones. In Wayland, the average family tax bill grew by
almost 10 percent, increasing it by $1,075. Wellesley’s average bill
was up $857. Lexington’s increased by $710.
When looking back to fiscal year 2011, these increases change from
hundreds to thousands. The annual family tax bill has grown more
than $1,000 in 50 towns and cities in the last five fiscal years.
Only five communities saw declines — all under $200 — during that
time period.
The Department of Revenue does not release average single family tax
bill information for every city or town in Massachusetts, including
Boston, many of its close suburbs, and Cape Cod vacation
destinations. Some of these communities have exemptions, meaning
they set their tax rates differently; others had yet to set their
fiscal year 2015 rates when the data were published.
In Boston, the average single family tax bill in fiscal year was
$3,520, a $103 uptick from the previous year, the city reported.
Still, the city’s average bill makes up only about two-thirds of the
statewide average.
A single family property tax bill is influenced by factors both in
and out of the home. A renovation or expansion can increase a tax
bill. And growth within the municipality — both residential and
commercial — plays a role, too. Single family tax bills change
relative to the rest of the municipality.
In some communities, growth in the annual tax bill can also be
attributed to local ballot initiatives that give the municipality
permission to hike property taxes to fund public schools,
infrastructure improvements, or other municipal expenses. These
voter-approved exclusions push communities’ year-to-year tax
increase
beyond the limits set by Proposition 2½.
In the wake of the recession, these increases are likely to
continue, said Geoff Beckwith, director of the Massachusetts
Municipal Association.
“Cities and towns rely more on property taxes to fund municipal
services than they have at any point since 1982,” Beckwith said.
The reliance on property taxes is, in part, due to decreased local
aid from the state due to budget constraints and the costs of
distributing services outpacing municipal income, said Beckwith.
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NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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