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CLT's Fall Membership
Letter
Our thanks to those of you
who've already made a contribution to keep CLT working for
taxpayers.
Please recognize how much
CLT has saved you in just the auto excise tax alone
this and every year with its 62% reduction under our
Proposition 2½. Take a moment and
check out what you have personally saved just
this year. Then
— if you haven't already —
consider supporting our ongoing
efforts on your behalf with just some of that savings,
even a token small percentage of what you've saved from
just this one CLT tax cut. If CLT folds
—
is not around to protect Prop 2½ and your auto excise tax reduction
—
how long do you suppose you'll be allowed to keep those savings?
You can make an
immediate contribution to CLT by credit card
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CLT UPDATE
Friday, October 4, 2013
Uh oh — "Tax Fairness" is on the horizon
|
State tax collections over the first three months
of the fiscal year are up 9.1 percent from the same period in fiscal
2013 and are running $199 million above the benchmark that lawmakers
and Gov. Deval Patrick used to build the $34 billion state budget.
The Department of Revenue reported Thursday that
more than $2.4 billion was collected in September, with a shortfall
in withholding collections offset by gains in quarterly estimated
income and corporate tax payments. September’s collections beat the
monthly benchmark by $59 million.
Democratic legislative leaders are eyeing
above-benchmark tax collections to replace an estimated $160 million
they had anticipated collecting this year from a new sales tax on
technology services, which was repealed last week. Lawmakers over
the summer raised taxes on cigarette, tobacco products and gasoline,
after raising the sales tax to 6.25 percent in 2009.
State House News Service
State Capitol Briefs
Thursday, October 3, 2013
Tax collection surge continues in September
State lawmakers have finally done the right thing
with the so-called “Tech Tax.”
By an overwhelming margin, they have tossed it in
the hopper of bad ideas. After only a few short weeks on the books,
the delete button has been pushed.
It was a major retreat for Democrats, who just a
few weeks ago had their arms twisted by their leadership to pass it.
Late last week, they stampeded away from it.
It was an embarrassment that never had to
happen....
The tax was a solution in search of a problem.
Billed as a way to pay for state infrastructure repairs, it came at
a time when the state is hauling in tax revenues hand over fist,
despite a still-sluggish economy that has seen employment numbers
remain stagnant.
August’s revenue numbers are a good example.
According to the state Department of Revenue, preliminary revenue
collections for August were 8.5 percent higher than the previous
August and $64 million above the monthly benchmark the state was
aiming at. There was no need to pick the pockets of one of the
brightest spots in our economy.
A Salem News editorial
Tuesday, October 1, 2013
Kicking the ‘Tech Tax’ out the door
After watching state legislators repeal a
controversial tax on software services last week, proponents of
rolling back the new gas tax law that links future increases to
inflation hope “flip-flopping” becomes contagious on Beacon Hill.
“We’d like them to consider the gas tax linked to
the CPI a real flop and repeal that one as well,” said Rep. Geoff
Diehl, a Whitman Republican and lead supporter of a ballot question
to repeal the gas tax indexing law in 2014.
Diehl was joined by three of his House Republican
colleagues and several other repeal proponents outside the State
House on Tuesday to continue the push to decouple the gas tax from
inflation. He was joined by Reps. Shaunna O’Connell (R-Taunton),
Leah Cole (R-Peabody) and Lenny Mirra (R-West Newbury)....
“I urge them again to flip flop on this gas tax
to infinity and beyond,” said conservative activist Marty Lamb. The
small group stood in front of a sign that read “Tank the Automatic
Gas Tax” and displayed two pairs of flip-flops on the sidewalk in
front of them, including a pair of black and white Kate Spade
sandals.
Republican State Committeeman Steve Aylward said
ballot drive organizers have collected more than 16,000 signatures
so far in the two weeks since petition papers were made available,
and have recruited more than 1,000 volunteer signature gatherers.
The group must collect at least 68,911 certified
signatures by Nov. 20, and has set a goal of 100,000 to ensure they
gain access to the 2014 ballot.
“Unlike the tech people who had lots of money and
lots of big money behind them which helped to overturn that
particular tax, we don’t,” Aylward said.
Though the Republican lawmakers expressed hope
for the Legislature acting to repeal the gas tax indexing law before
it reaches the ballot, Democratic leadership in both the House and
Senate have shown no inclination to bring it up for a vote.
State House News Service
Tuesday, October 1, 2013
Gas tax indexing opponents hoping for another "flop and repeal"
Republicans had a rare moment of glory at the
State House last week. With nearly the entire Democratic membership
succumbing to pressure to repeal a new sales tax on software
services, the cowed pols actually had to show up in person and ...
take the vote.
Rep. George Peterson (R-Grafton) went old-school
during his moment at the microphone. “We told you so!” he crowed,
while his Democratic colleagues shifted in their seats. “We told you
in April. We told you in May. We told you in June.”
Forgive the long-suffering Peterson — these
moments don’t come along very often....
In truth, the parties spar over issues all the
time. The minority party does its best to serve as the spirited
opposition, at least rhetorically.
The difference last week was that the Democrats,
who are accustomed to having their way, were yielding to the
position held by Republicans, now on the rare winning side of a
major tax issue. That never happens anymore, in a body that is
currently weighted 166-32 in favor of Democrats, and democracy is
the loser for it.
This isn’t to suggest that Republicans have a
corner on good ideas. If they did there would be more than three of
them currently sitting in the 40-member Senate....
They can essentially admit to their constituents
that they weren’t paying attention before they voted to raise taxes
by $500 million. When they were given the opportunity to strip the
tech tax from the bill back in April, nearly to a person, they voted
“no” because that’s what leadership expected. They should have been
embarrassed to admit that they were sheep blindly following the
herd. Instead, they were defiant.
Without balance you have scripted outcomes and
largely meaningless debates. Without balance you have that special
back room where, during the annual budget debate, House members who
want to amend the document (that they were given no role in writing)
have to go to Democratic leaders, hat-in-hand, to ask for a favor.
The Boston Herald
Tuesday, October 1, 2013
Beacon Hill party just too crowded
Stranglehold by Dems threatens democracy
By Julie Mehegan
The lowest 20 percent of earners in Massachusetts
during 2011 paid 12.2 percent of their earnings in income, sales and
certain excise taxes and the highest wage earners pay 5.7 percent,
according to Department of Revenue data presented Tuesday to members
of the new Tax Fairness Commission.
The commission, charged with recommending ways to
make the tax code simpler and fairer while promoting economic growth
and staying competitive with other states, met for the second time
Tuesday.
The figures do not indicate any new trends,
officials said, but illustrate tax filers’ effective tax rate for
income tax and selected consumption taxes in 2011, according to DOR
officials. The commission asked DOR for the information, which
included 3.5 million tax filers.
In fiscal year 2013, personal income taxes were
the largest source of tax revenue in the state, accounting for 58
percent and totaling more than $12.8 billion. Sales and use taxes
accounted for $5.16 billion, or 23.3 percent. Corporate and business
taxes totaled $2.26 billion, or 10 percent and all other taxes rang
in at $1.86 billion, or 8.4 percent, according to DOR data....
The Legislature this year rejected a plan Gov.
Deval Patrick proposed in January that would have raised $1.9
billion in new revenue for the state by increasing the income tax
rate, lowering the sales tax rate and eliminating dozens of personal
and corporate tax exemptions and deductions. The governor argued his
plan would not only generate the money needed to invest in
transportation, but make the tax system more equitable for people
across the income spectrum. Lawmakers opted for a smaller package of
tax hikes adding to the costs of gasoline and tobacco....
Created by the Legislature, the commission
includes economists, business leaders, lawmakers and others to
review the state’s tax code. The commission has five months to do
its work, with final recommendations due March 1....
The commission was created by a Sen. Karen Spilka
amendment to the transportation financing package the Legislature
approved in July. The 15-member panel’s work comes on the heels of
recommendations made recently by a Tax Expenditure Commission that
took a look at the system of tax exemptions, deductions and
subsidies extended to individuals and corporations to relieve tax
burdens on certain populations and spur economic growth.
State House News Service
Tuesday, October 1, 2013
Commission digests data on taxes paid as percentage of income
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Chip Ford's CLT
Commentary
According to the state Department of Revenue (DOR),
last month's (August) state tax collections were 8.5 percent higher
than the previous August. This August's tax collections exceeded
expectations by $64 million above what was anticipated.
Yesterday the DOR reported on September's revenue
collections: "State tax collections over the first three months of
the fiscal year are up 9.1 percent from the same period in fiscal
2013 and are running $199 million above the benchmark that lawmakers
and Gov. Deval Patrick used to build the $34 billion state budget."
September’s tax collections exceeded expectations by $59 million
Regardless, no doubt we'll hear soon enough that
More Is Never Enough (MINE) and that state taxes need to be
increased again.
What most bears watching now and in the days
ahead is the new "Tax Fairness Commission," created within the
recent tax hike legislation. We've already seen what Gov. Patrick's
definition of tax fairness is.
You only need to recall the details within his
initial $1.9 Billion tax hike "transportation bill" to see where
this commission is going. He proposed hiking the income tax to 6.25%
(from its present 5.25%), lowering the 6.25% state sales tax to
4.5%, and eliminating 45 personal tax deductions worth $1.3 billion
annually, including deductions for T passes, college scholarships,
and dependents under 12.
According to a Jan. 18 Boston Globe report ("More
tax hikes in Patrick’s blueprint"):
[Patrick's
Secretary of Administration & Finance, Glen Shor]
countered that even though Patrick’s plan represents an
overall tax increase, roughly half of taxpayers would
see either a cut or no change in their taxes.
That is because Patrick is seeking to double the amount
of earnings that are exempt from income taxes, going
from the current $4,400 for a single person to $8,800.
That means workers who earn $50,000 a year would pay
income taxes on $41,200 of their income, exempting a
larger share of their paychecks from taxation than
workers who earn, say, $150,000 a year.
The goal, Shor said, is to push more tax burden onto
higher-income earners and reduce it for those earning
less.
“You increase the fairness of the tax system overall,”
said Noah Berger, executive director of the
Massachusetts Budget and Policy Center, a liberal
research group.
"Tax Fairness" to the tax-borrow-and-spenders
means if you work and pay taxes you should pay higher taxes; if you
don't work and instead live off taxpayers' sweat, the state should
help you avoid even the sales tax. The entitlement class doesn't
file or pay income taxes, so eliminating tax deductions wouldn't
affect them.
"The tax commission meets again Nov. 12. The
group expects to meet once a month through January and twice in
February to meet its deadline."
"The commission has five months to do its work,
with final recommendations due March 1." That's just in time for
next spring's FY'15 budget deliberations and any new tax hike
proposals . . .
If CLT is still standing, we'll be watching this
closely!
The petition drive to abolish the Perpetual
Automatic Gas Hikes is underway as the deadline to collect
signatures to put it on the 2014 ballot gets closer.
If you want to sign a petition, circulate a
petition, or help getting signatures at malls around the state, you
can download a copy and find more information below:
Help us
Tank The
Automatic Gas Tax Hikes
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Chip Ford |
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The Salem News
Tuesday, October 1, 2013
A Salem News editorial
Kicking the ‘Tech Tax’ out the door
State lawmakers have finally done the right thing with the so-called
“Tech Tax.”
By an overwhelming margin, they have tossed it in the hopper of bad
ideas. After only a few short weeks on the books, the delete button
has been pushed.
It was a major retreat for Democrats, who just a few weeks ago had
their arms twisted by their leadership to pass it. Late last week,
they stampeded away from it.
It was an embarrassment that never had to happen.
Democratic leadership failed to heed all the warning signs
indicating this was a bad tax, a job-killing, economy-stalling
burden that our tech-heavy state didn’t need. It applied the state’s
6.25 percent sales tax to a large segment of our economy — software
and technical services.
The tech tax was a poorly vetted policy, so broadly and vaguely
written that even the state Department of Revenue was unclear about
its scope. Democratic legislators had only a vague idea of what they
were voting on but, nevertheless, followed their leaders.
House Speaker Robert DeLeo, one of those leaders, hailed the
reversal after the fact, saying this year’s tax revenue windfall
made it unnecessary to raise other taxes.
“I’m not interested in new taxes to replace the tax we cut
yesterday,” DeLeo said.
Michael Widmer, who heads the Massachusetts Tax Foundation, a
nonprofit group that studies state finances and policy, put it
differently, crediting business lobbies for successfully pressuring
legislators.
“The passing of the tax reflected a lack of due diligence on the
part of lawmakers,” said Widmer, whose group lobbied against it.
“The business community finally raised its voice.”
The tax was a solution in search of a problem. Billed as a way to
pay for state infrastructure repairs, it came at a time when the
state is hauling in tax revenues hand over fist, despite a
still-sluggish economy that has seen employment numbers remain
stagnant.
August’s revenue numbers are a good example. According to the state
Department of Revenue, preliminary revenue collections for August
were 8.5 percent higher than the previous August and $64 million
above the monthly benchmark the state was aiming at. There was no
need to pick the pockets of one of the brightest spots in our
economy.
State House News Service
Tuesday, October 1, 2013
Gas tax indexing opponents hoping for another "flop and repeal"
By Matt Murphy
After watching state legislators repeal a controversial tax on
software services last week, proponents of rolling back the new gas
tax law that links future increases to inflation hope
“flip-flopping” becomes contagious on Beacon Hill.
“We’d like them to consider the gas tax linked to the CPI a real
flop and repeal that one as well,” said Rep. Geoff Diehl, a Whitman
Republican and lead supporter of a ballot question to repeal the gas
tax indexing law in 2014.
Diehl was joined by three of his House Republican colleagues and
several other repeal proponents outside the State House on Tuesday
to continue the push to decouple the gas tax from inflation. He was
joined by Reps. Shaunna O’Connell (R-Taunton), Leah Cole (R-Peabody)
and Lenny Mirra (R-West Newbury).
The indexing provision was included in the recent transportation
financing law and defended by Democratic leaders as a way of
protecting against the declining value of the gas tax over time.
Lawmakers who crafted the gas tax law estimate the indexing
provision will generate $15 million a year over the next five years.
Opponents, however, say tying the gas tax to inflation amounts to
“taxation without representation,” ensuring that future increases in
the tax occur without the Legislature having to cast votes. Critics
say the rising gas tax will not only hurt drivers and businesses,
but drive up the cost of food and other goods for consumers.
“I urge them again to flip flop on this gas tax to infinity and
beyond,” said conservative activist Marty Lamb. The small group
stood in front of a sign that read “Tank the Automatic Gas Tax” and
displayed two pairs of flip-flops on the sidewalk in front of them,
including a pair of black and white Kate Spade sandals.
Republican State Committeeman Steve Aylward said ballot drive
organizers have collected more than 16,000 signatures so far in the
two weeks since petition papers were made available, and have
recruited more than 1,000 volunteer signature gatherers.
The group must collect at least 68,911 certified signatures by Nov.
20, and has set a goal of 100,000 to ensure they gain access to the
2014 ballot.
“Unlike the tech people who had lots of money and lots of big money
behind them which helped to overturn that particular tax, we don’t,”
Aylward said.
Though the Republican lawmakers expressed hope for the Legislature
acting to repeal the gas tax indexing law before it reaches the
ballot, Democratic leadership in both the House and Senate have
shown no inclination to bring it up for a vote.
During last week’s software tax repeal debate, House Republicans did
not offer an amendment to decouple the gas tax from inflation. Diehl
said he knew it would be ruled out of order, as were all three of
the amendments he did file, including one to exempt municipalities
from the 3-cent gas tax increase included in the same bill.
Senate Republicans forced a vote to repeal the inflation adjusted
gas tax, but lost 9-28, with six Democrats breaking rank.
“Clearly, getting the signatures we need is going to be a factor. I
think that if we collect the signatures, maybe their position will
evolve even further to not want to see it on the ballot itself and
they might move forward and go for the repeal,” Diehl said.
The Boston Herald
Tuesday, October 1, 2013
Beacon Hill party just too crowded
Stranglehold by Dems threatens democracy
By Julie Mehegan
Republicans had a rare moment of glory at the State House last week.
With nearly the entire Democratic membership succumbing to pressure
to repeal a new sales tax on software services, the cowed pols
actually had to show up in person and ... take the vote.
Rep. George Peterson (R-Grafton) went old-school during his moment
at the microphone. “We told you so!” he crowed, while his Democratic
colleagues shifted in their seats. “We told you in April. We told
you in May. We told you in June.”
Forgive the long-suffering Peterson — these moments don’t come along
very often.
GOP senators the next day spent the bulk of their session making the
same point. It was a fun debate to watch, and not because it was
unpredictable or unruly — legislative sessions never are these days,
and like all others the outcome of this one was pre-ordained.
But because the two parties engaged in something that at least
*resembled* an actual debate.
In truth, the parties spar over issues all the time. The minority
party does its best to serve as the spirited opposition, at least
rhetorically.
The difference last week was that the Democrats, who are accustomed
to having their way, were yielding to the position held by
Republicans, now on the rare winning side of a major tax issue. That
never happens anymore, in a body that is currently weighted 166-32
in favor of Democrats, and democracy is the loser for it.
This isn’t to suggest that Republicans have a corner on good ideas.
If they did there would be more than three of them currently sitting
in the 40-member Senate. And the tech tax notwithstanding, House
Speaker Robert DeLeo and Senate President Therese Murray are often
on the responsible side of fiscal issues.
But the body desperately needs balance — and last week’s discussion
just made it even more clear.
Under lopsided one-party rule you have members in the majority party
who can, with a straight face, argue that the tech tax was enacted
because the complaints against it weren’t loud enough — quite
literally whining that no one told them how bad it could be.
They can essentially admit to their constituents that they weren’t
paying attention before they voted to raise taxes by $500 million.
When they were given the opportunity to strip the tech tax from the
bill back in April, nearly to a person, they voted “no” because
that’s what leadership expected. They should have been embarrassed
to admit that they were sheep blindly following the herd. Instead,
they were defiant.
Without balance you have scripted outcomes and largely meaningless
debates. Without balance you have that special back room where,
during the annual budget debate, House members who want to amend the
document (that they were given no role in writing) have to go to
Democratic leaders, hat-in-hand, to ask for a favor.
OK, so you had some of that even when there was a more even
distribution of Republicans and Democrats in the House.
And this isn’t strictly a campaign plug for more Republicans (though
their voice of fiscal restraint would balance nicely what we have
now).
It could be more Libertarians, more Green-Rainbows — hell, throw in
a few members of the Pirate Party or the Pizza Party (yes, there are
such official designations in Massachusetts). As long as it succeeds
in loosening one party’s stranglehold on democracy.
State House News Service
Tuesday, October 1, 2013
Commission digests data on taxes paid as percentage of income
By Colleen Quinn
The lowest 20 percent of earners in Massachusetts during 2011 paid
12.2 percent of their earnings in income, sales and certain excise
taxes and the highest wage earners pay 5.7 percent, according to
Department of Revenue data presented Tuesday to members of the new
Tax Fairness Commission.
The commission, charged with recommending ways to make the tax code
simpler and fairer while promoting economic growth and staying
competitive with other states, met for the second time Tuesday.
The figures do not indicate any new trends, officials said, but
illustrate tax filers’ effective tax rate for income tax and
selected consumption taxes in 2011, according to DOR officials. The
commission asked DOR for the information, which included 3.5 million
tax filers.
In fiscal year 2013, personal income taxes were the largest source
of tax revenue in the state, accounting for 58 percent and totaling
more than $12.8 billion. Sales and use taxes accounted for $5.16
billion, or 23.3 percent. Corporate and business taxes totaled $2.26
billion, or 10 percent and all other taxes rang in at $1.86 billion,
or 8.4 percent, according to DOR data.
Rep. Randy Hunt, a Sandwich Republican and member of the commission,
described the difference between the lowest and highest percentages
of effective tax rates as “off the charts,” and asked about other
income brackets.
Those closest to the lowest earners paid 8 percent, those in the
middle 20 percent of incomes paid 6.68 percent, and those in the
fourth 20 percent, closest to the highest earners, paid 6.25
percent, according to the DOR data
Other commission members said they want DOR to compare the data to
other states where income levels are similar, such as New York and
Connecticut.
Rep. Jay Kaufman (D-Lexington), co-chair of the commission along
with
Sen. Michael Rodrigues (D-Westport), said the commission also
wants to look at property and sales taxes more closely.
Created by the Legislature, the commission includes economists,
business leaders, lawmakers and others to review the state’s tax
code. The commission has five months to do its work, with final
recommendations due March 1.
“What this leads me to believe, just looking at this raw data, is
that the higher income folks pay less of their income to taxes. So
as a total system the tax system in Massachusetts is regressive,”
Rodrigues said after the meeting.
Massachusetts has worked hard to have a flat income tax, which is
regressive, “as progressive as possible” Rodrigues said. The state
has also worked to have a regressive tax, the sales tax, as
progressive a possible by exempting clothing, food and medical
supplies.
The Legislature this year rejected a plan Gov. Deval Patrick
proposed in January that would have raised $1.9 billion in new
revenue for the state by increasing the income tax rate, lowering
the sales tax rate and eliminating dozens of personal and corporate
tax exemptions and deductions. The governor argued his plan would
not only generate the money needed to invest in transportation, but
make the tax system more equitable for people across the income
spectrum. Lawmakers opted for a smaller package of tax hikes adding
to the costs of gasoline and tobacco.
The commission was created by a Sen. Karen Spilka amendment to the
transportation financing package the Legislature approved in July.
The 15-member panel’s work comes on the heels of recommendations
made recently by a Tax Expenditure Commission that took a look at
the system of tax exemptions, deductions and subsidies extended to
individuals and corporations to relieve tax burdens on certain
populations and spur economic growth.
When thinking about the tax code, DOR Commissioner Amy Pitter said,
the commission needs to look at shifts in the economy and trends in
consumer spending. She said the data does not capture benefits
higher income people receive from exemptions meant to help those
with lower incomes, such as the sales tax exemption on food and
clothing.
Rich people buy clothing more often so their instances of benefiting
from the exemption are higher than lower income taxpayers; they also
buy more expensive food, she said.
“There is some sort of hidden quirks in the data that is worth
thinking about,” Pitter said.
Commission members said they also want to look at Massachusetts’
competitiveness for business in comparison to other states.
Michael Widmer, president of the Massachusetts Taxpayers Foundation,
said “we need to have a full discussion on economic competitiveness,
and how Massachusetts business taxes compare to other states.”
The tax commission meets again Nov. 12. The group expects to meet
once a month through January and twice in February to meet its
deadline.
Rodrigues said the commission is gathering information to “propose
any prescriptions for fixing anything. We are not quite there yet.
We are careful. We are trying to take this one step at a time.”
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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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