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CLT UPDATE
Thursday, May 21, 2015
"Tell
the Suckers"
|
Remember the recession of 1989? No? Well, not
many do. But trust us, there was one.
We know there was because that was the excuse the
Massachusetts Legislature used when it raised the state’s income tax
from 5 percent to 5.95 percent.
But not to worry, legislators promised way back
then — when we were still on our first President Bush and Justin
Bieber was five years yet to be born — the state’s “permanent”
income tax rate would always be 5 percent. The hike to 5.95 percent
would only be “temporary.”
Well, here we are 26 years later and legislators
have yet to return the income tax rate to 5 percent — despite the
voters’ overwhelming demand in a 2000 ballot measure that they do so
immediately. Under enormous pressure from taxpayers, legislators
have grudgingly lowered the tax rate to current level of 5.15
percent. But they have yet to keep their promise to restore the 5
percent “permanent” rate.
And now, they never will....
The Senate plan, in effect, performs like a
graduated tax without the need for a messy constitutional amendment.
“If their agenda is to tax some citizens more in
order to tax other citizens less, this makes it clear that
legislators are using the personal exemption to effectively graduate
the income tax, which is unconstitutional,” Barbara Anderson,
president of Citizens for Limited Taxation, told CNHI
Statehouse reporter Christian M. Wade....
What happens next is up to the House and possibly
Gov. Charlie Baker’s veto. But the Democrats of the state Senate
have shown their true colors. The money you work so hard to earn is
just wealth for them to redistribute as they see fit in the name of
“fairness.”
And promises? Those are just the lies you tell
the suckers who have to pay the bills.
A Salem News editorial
Thursday, May 21, 2015
Senate tax plan betrays an old promise
In voting to freeze the income tax rate and offer
a package of tax relief and tax credits to low-income workers, the
Massachusetts Senate may have inserted language into its budget that
the House objects to on procedural grounds.
That thorny area is in turn compounded by
disagreement over a priority that the new Senate president
highlighted in his inaugural speech and the prickly issue of further
changing a voter-approved income tax cut. Taken together, the issues
could complicate efforts to deliver a final budget to the governor
in time for the July 1 start of the new fiscal year....
An anonymous House official said in a statement
on Friday the Senate's interpretation "directly contradicts 130
years' of Supreme Judicial Court precedent on the matter" and
suggested that if the Senate turns the budget into a money bill the
House "will assess its legal options at that time." ...
Gov. Charlie Baker, a Republican who supports
increasing the earned income tax credit and helping pay for it by
abolishing the film tax credit, said lawmakers made a "commitment"
to a formula that would allow the income tax rate to drop to 5
percent.
Asked Wednesday about freezing the income tax
rate, Baker said, "I just don't think it's a good idea to raise
taxes on one group of people at the same time you're reducing taxes
on another."
Barbara Anderson, executive director of
Citizens for Limited Taxation, told the News Service she
considers the Senate's action a tax hike.
"It's up above where it would have been, which is
a tax hike," Anderson said. Providing press clippings to bolster her
case, Anderson said when the income tax was raised from 5 percent to
5.75 percent in 1989, it was pitched as a temporary increase. She
said, "We are still waiting for the 5 percent and so we're not
buying any of the complexities here."
In 2000 Anderson helped lead a ballot referendum
to reduce the income tax to 5 percent by 2003, but lawmakers halted
the slide in 2002, adding economic benchmarks that would need to be
triggered for the decrease to continue. State officials expect the
income tax will go down to 5.1 percent in January.
State House News Service
Wednesday, May 20, 2015
Senate tax plan adds complexity to Mass. budget talks
Rosenberg splits with Baker on the funding side
of the ledger. To pay for the tax cut, Baker proposed eliminating
the film tax credit, a program meant to encourage productions in
Massachusetts that doled out $80 million last year. Killing the
credit would not have paid for the entire plan, but would have been
a start. The Senate, in its budget, would pay for the earned income
tax credit increase by freezing the state income tax rate at 5.15
percent, rather than allowing it to continue falling to the 5
percent mandated by voters in a referendum.
A Boston Globe editorial
Thursday, May 21, 2015
Mass. Senate’s budget brings relief for working poor into sight
When originally written, the Massachusetts
constitution envisioned the House and Senate working much
differently. The House would be more democratic, with each
district containing roughly equal numbers of voters, while
Senate districts would be distributed according to the amount of
taxes paid. Like the British parliament, Massachusetts required
tax bills to originate in the more democratic house.
But that arrangement no longer applies to
Massachusetts ...
Massachusetts senators now have all the
democratic legitimacy as their House counterparts. House Speaker
Robert DeLeo may see a power grab, and he may be right — but
there’s no longer a case to be made that House members have some
elevated claim to fiscal wisdom.
A Boston Globe editorial
Thursday, May 21, 2015
Old rule against Senate-written tax legislation is without
purpose
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Chip Ford's CLT
Commentary
Note that the Boston Globe in its editorial
refers to "standard deduction for all tax filers." In the
Senate's legislation we are not dealing with standard deductions.
We are dealing with personal exemptions.
Wow, how can I beat the Salem News editorial
— it's almost like I wrote it myself!
I'll leave it at that for today.
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Chip Ford |
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The Salem News
Thursday, May 21, 2015
A Salem News editorial
Senate tax plan betrays an old promise
Remember the recession of 1989? No? Well, not many do. But trust us,
there was one.
We know there was because that was the excuse the Massachusetts
Legislature used when it raised the state’s income tax from 5
percent to 5.95 percent.
But not to worry, legislators promised way back then — when we were
still on our first President Bush and Justin Bieber was five years
yet to be born — the state’s “permanent” income tax rate would
always be 5 percent. The hike to 5.95 percent would only be
“temporary.”
Well, here we are 26 years later and legislators have yet to return
the income tax rate to 5 percent — despite the voters’ overwhelming
demand in a 2000 ballot measure that they do so immediately. Under
enormous pressure from taxpayers, legislators have grudgingly
lowered the tax rate to current level of 5.15 percent. But they have
yet to keep their promise to restore the 5 percent “permanent” rate.
And now, they never will.
Why? Because while individual legislators are mostly decent people
of the sort you might have over to the house for tea without
worrying about locking up the silverware, collectively, they are a
band of thieves.
The state Senate Tuesday voted for a plan that would freeze the
income tax rate at 5.15 percent and at the same time expand the
earned income tax credit for low-income families and increase the
personal exemption for all taxpayers. The income tax rate had been
scheduled to drop to 5.1 percent in 2016.
Under the Senate plan, supported by all but five Democrats and no
Republicans, low- and middle-income families with children will keep
a little more of their money than they would if the tax rate were
allowed to continue to fall toward 5 percent. But higher-income
earners will pay substantially more.
That, in addition to the promise-breaking, is what makes the plan so
objectionable. Progressives like Senate President Stanley Rosenberg,
D-Amherst, have for years been trying to establish a graduated
income tax in Massachusetts. But a graduated tax — under which those
with higher incomes pay higher tax rates — violates the state
constitution.
The Senate plan, in effect, performs like a graduated tax without
the need for a messy constitutional amendment.
“If their agenda is to tax some citizens more in order to tax other
citizens less, this makes it clear that legislators are using the
personal exemption to effectively graduate the income tax, which is
unconstitutional,” Barbara Anderson, president of Citizens
for Limited Taxation, told CNHI Statehouse reporter Christian M.
Wade.
Local state senators, including Joan Lovely of Salem, supported the
measure.
Senate Minority Leader Bruce Tarr, R-Gloucester, said Republicans
supported a larger expansion of the earned income credit but would
fund it without freezing the income tax.
“We can’t find some room to be able to afford the EITC?” Tarr asked.
He said other spending choices in the $38 billion budget could be
revisited and noted there’s a $163 million surplus in the fiscal
2015 budget.
Tarr told the State House News Service Democrats had a “hidden
agenda” of protecting the income tax as a revenue source while also
“redistributing” wealth without having to amend the state
constitution to implement a graduated income tax.
That agenda is not exactly “hidden.”
What happens next is up to the House and possibly Gov. Charlie
Baker’s veto. But the Democrats of the state Senate have shown their
true colors. The money you work so hard to earn is just wealth for
them to redistribute as they see fit in the name of “fairness.”
And promises? Those are just the lies you tell the suckers who have
to pay the bills.
State House News Service
Wednesday, May 20, 2015
Senate tax plan adds complexity to Mass. budget talks
By Andy Metzger
In voting to freeze the income tax rate and offer a package of tax
relief and tax credits to low-income workers, the Massachusetts
Senate may have inserted language into its budget that the House
objects to on procedural grounds.
That thorny area is in turn compounded by disagreement over a
priority that the new Senate president highlighted in his inaugural
speech and the prickly issue of further changing a voter-approved
income tax cut. Taken together, the issues could complicate efforts
to deliver a final budget to the governor in time for the July 1
start of the new fiscal year.
Senate President Stanley Rosenberg said Tuesday that if the
six-member conference committee that will be appointed to reconcile
differences between the two bills does not reach a resolution he and
Speaker Robert DeLeo would determine how to proceed.
"The conferees will be meeting and considering all of the
differences. The next step would be if they can't come to agreement
they would come to the speaker and the Senate president and we would
have a discussion about it and determine at that point how to move
forward," Rosenberg told reporters.
On a 29 to 11 vote Tuesday, the Senate voted to freeze the income
tax rate at 5.15 percent, gradually increase the state's earned
income tax credit by 50 percent and increase the personal income tax
exemption for all taxpayers.
Current law includes economic triggers that can automatically
ratchet down the income tax to 5 percent, and Senate Minority Leader
Bruce Tarr, a Gloucester Republican, accused Democrats of an
alternate agenda to prop up state revenues by removing the path to a
lower income tax rate.
While five Democrats joined Republican senators in opposing the
change, Senate Democrats supporting the measure have presented their
action as a tax cut because of the increase in the personal
exemption.
"There's no guarantee in existing law that they're going to get 5
percent anyway," said Sen. Benjamin Downing, a Pittsfield Democrat,
who co-sponsored the amendment. He said, "This is a way to go about
cutting taxes."
After the House adopted an amendment increasing the tax credit for
conservation land, Rosenberg took that opening to classify the House
budget as a "money bill," legislation where taxes can be raised or
lowered. Money bills are required to originate in the House,
according to the state's constitution and DeLeo has rejected the
idea that the budget the House passed is a money bill.
An anonymous House official said in a statement on Friday the
Senate's interpretation "directly contradicts 130 years' of Supreme
Judicial Court precedent on the matter" and suggested that if the
Senate turns the budget into a money bill the House "will assess its
legal options at that time."
House Counsel James Kennedy has not responded to News Service
requests for comment and DeLeo spokesman Seth Gitell declined to
comment.
Asked whether the Senate is prepared for legal action from the
House, Senate Chairman of the Revenue Committee Michael Rodrigues
said, "I have no clue why they could take legal action. In my
opinion the House chose to increase the conservation land tax credit
and we chose to increase the earned income tax credit."
By mid-afternoon Wednesday, the Senate had adopted no other
amendments changing tax laws and rejected a bid by Tarr to increase
the conservation land tax credit. According to an aide the only tax
amendment remaining is a Tarr amendment making changes to corporate
tax law.
Tarr, who believes reducing taxes does not transform a bill into a
money bill but finds it hard to believe a $38 billion budget does
not qualify as a money bill, said the speaker could seek an opinion
from the state's highest court.
"He can go to conference and refuse to accept the changes that we
proposed in our budget," Tarr told reporters. "In terms of the
legality of things, he could certainly seek an opinion from the SJC
as to whether or not this was a money bill."
Gov. Charlie Baker, a Republican who supports increasing the earned
income tax credit and helping pay for it by abolishing the film tax
credit, said lawmakers made a "commitment" to a formula that would
allow the income tax rate to drop to 5 percent.
Asked Wednesday about freezing the income tax rate, Baker said, "I
just don't think it's a good idea to raise taxes on one group of
people at the same time you're reducing taxes on another."
Barbara Anderson, executive director of Citizens for
Limited Taxation, told the News Service she considers the
Senate's action a tax hike.
"It's up above where it would have been, which is a tax hike,"
Anderson said. Providing press clippings to bolster her case,
Anderson said when the income tax was raised from 5 percent to 5.75
percent in 1989, it was pitched as a temporary increase. She said,
"We are still waiting for the 5 percent and so we're not buying any
of the complexities here."
In 2000 Anderson helped lead a ballot referendum to reduce the
income tax to 5 percent by 2003, but lawmakers halted the slide in
2002, adding economic benchmarks that would need to be triggered for
the decrease to continue. State officials expect the income tax will
go down to 5.1 percent in January.
The Boston Globe
Thursday, May 21, 2015
A Boston Globe editorial
Mass. Senate’s budget brings relief for working poor into sight
The state Senate rose to the occasion on Tuesday, unveiling a
thoughtful response to Governor Baker’s budget. In its plan, the
Senate’s Democratic leadership preserved one of the Republican
governor’s most important proposals, a boost in the earned income
tax credit for the working poor, while offering a credible
alternative funding mechanism. The plan has ruffled feathers on
Beacon Hill because the Senate isn’t supposed to propose tax-law
changes; it’s only by exploiting a loophole that the Senate was able
to do so. But the chamber and Senate President Stan Rosenberg
deserve credit for taking up the governor’s challenge to help the
working poor in a financially responsible way.
The earned income tax credit puts money back into the hands of
filers with low incomes, and is. The credit is among the most
effective ways to help poor families. In addition to the earned
income tax credit, the Senate would also raise the standard
deduction for all tax filers.
Rosenberg splits with Baker on the funding side of the ledger. To
pay for the tax cut, Baker proposed eliminating the film tax credit,
a program meant to encourage productions in Massachusetts that doled
out $80 million last year. Killing the credit would not have paid
for the entire plan, but would have been a start. The Senate, in its
budget, would pay for the earned income tax credit increase by
freezing the state income tax rate at 5.15 percent, rather than
allowing it to continue falling to the 5 percent mandated by voters
in a referendum. Senators emphasize that all filers’ taxes would
still go down; thanks to the change in the standard deduction, it is
only taxpayers with very high incomes who’ll feel the 0.05 percent
difference.
Given the choice, it seems better to help the poor in Massachusetts
at the expense of Hollywood rather than Wellesley. But the Senate
has politics to consider, and it’s clear that House Speaker Robert
DeLeo doesn’t want to touch the film tax credit. Baker and Rosenberg
have now put forward reasonable plans to help the state’s working
poor, adding momentum to an idea whose time has come.
The Boston Globe
Thursday, May 21, 2015
A Boston Globe editorial
Old rule against Senate-written tax legislation is without purpose
Senators
found a loophole allowing them to propose tax changes in this
year’s budget — and they had every right to use it. The rule against
Senate-written tax legislation is a vestigial remnant of
18th-century politics; its original purpose disappeared long ago.
While the 1780 requirement that “all money bills shall originate in
the house of representatives” remains in place, there’s no
principled reason for the Senate not to circumvent it whenever
possible.
When originally written, the
Massachusetts constitution envisioned the House and Senate
working much differently. The House would be more democratic, with
each district containing roughly equal numbers of voters, while
Senate districts would be distributed according to the amount of
taxes paid. Like the British parliament, Massachusetts required tax
bills to originate in the more democratic house.
But that arrangement no longer applies to Massachusetts, and it
wouldn’t be legal anyway. Since a
1964 Supreme Court decision, all states have been required to
use a “one man, one vote” system for all legislative bodies. Today’s
state Senate districts are not any less democratic than state House
districts; they’re just bigger.
Massachusetts senators now have all the democratic legitimacy as
their House counterparts. House Speaker Robert DeLeo may see a power
grab, and he may be right — but there’s no longer a case to be made
that House members have some elevated claim to fiscal wisdom.
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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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