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CLT UPDATE
Thursday, September 3, 2015

Grad Tax ballot question clears the AG


Twenty petitions proposing new laws that would, among other things, legalize recreational marijuana, expand the state's authority to license charter schools and protect whales from fishing nets, passed their first legal test after Attorney General Maura Healey on Wednesday certified the initiative petitions, clearing a path toward the 2016 ballot.

Healey also certified two proposed amendments to the state constitution that would impose a higher income tax on earnings over a million dollars to help fund education and transportation and another clarifying that no part of the constitution requires public funding of abortion.

The citizen-generated constitutional amendments have a longer road to the ballot than the other petitions, requiring at least a quarter of the Legislature to back the measures in 2016 and again in the 2017-2018 session before they could possibly appear before voters in 2018.

State House News Service
Wednesday, September 2, 2015
Hurdles remain, but 2016 ballot question landscape is taking shape


Attorney General Maura Healey on Wednesday declared that ballot initiatives to raise taxes on the wealthy, legalize marijuana, and create restrictions aimed at curbing cruelty to farm animals should be allowed to move forward....

Supporters of higher taxes on incomes greater than $1 million will move forward with petitions calling for a constitutional amendment. Similar ballot measures have failed five times, the last in 1994. The current proposal would scrap the flat state income tax — everyone currently pays at a rate of 5.15 percent — and create a two-tiered system, with all earnings over $1 million taxed at a rate 4 percentage points higher.

The Boston Globe
Thursday, September 3, 2015
AG rejects proposed ballot question on fireworks
Healey certifies ballot initiatives on taxes, marijuana


Voters could get a chance to decide on a change to the income tax rate where people who make over $1 million a year would be taxed at a higher rate on the amount over $1 million, with the additional state revenue dedicated to education and transportation.

"What this ballot question would do is require anyone in Massachusetts who makes more than a million dollars a year — and that's not many people — to pay an additional four percentage points on their income tax, and that money would be dedicated to improving our public schools our roads and bridges and our public transportation," Steve Crawford, a spokesman for the group Raise Up Massachusetts, told WGBH News Wednesday.

Expect resistance to the million-makers' tax from the anti-tax increase crusaders at Citizens for Limited Taxation, the group that's been fighting any kind of graduated income tax in Massachusetts for decades. Though Healey's sign-off certifies that the question's language meets the requirements set out in the state constitution for initiatives, opponents could still argue that it violates certain provisions of the constitution itself.

WGBH PBS TV-2
Wednesday, September 2, 2015
Healey Gives Stamp Of Approval For Million-Dollar Tax,
Marijuana Legalization Ballot Questions


The Argument:  Should the state adopt the proposed tax on top earners to raise money for education and transportation?

YES State Representative Jay R. Kaufman (A Lexington Democrat, House chairman of the Joint Committee on Revenue)
NO State Representative Kevin J. Kuros (An Uxbridge Republican whose district also includes Bellingham, Blackstone, and Millville)

Read their debate reproduced below . . .

The Boston Globe West edition
Wednesday, August 6, 2015


Chip Ford's CLT Commentary

The Boston Globe reported:  "The current proposal would scrap the flat state income tax — everyone currently pays at a rate of 5.15 percent — and create a two-tiered system . . ."

This is precisely the problem with any potential graduated income tax:  It must "scrap the flat state income tax."  Under any guise, pretext, or for any reason, well-intentioned or otherwise, it is but a stepping stone to a full-blown "progressive" income tax.  This proposal would end the historic flat tax and replace it with two different tax rates depending on income creating the first graduated income tax in the long history of Massachusetts.

To break with this long-accepted history of the ultimate in tax fairness everyone paying the same rate of taxation regardless of income the tax-borrow-and-spend cabal is initially targeting only those making a million dollars or more for now.

What will they do when those highly-mobile millionaires pack up and move to a no- or low-tax state — say 'distant' New Hampshire a few miles north — with Massachusetts losing all that revenue?  What will happen when there's not enough revenue to fund the state's ever-expanding annual budgets?  Why they'll just promote a new tax bracket of victims to tax at a higher rate — the new high-earners.  After all, the vast middle-class is where the real money is!

The State House News Service reported:  "Though ballot questions are prohibited from allocating money to specific programs, Healey determined that the language setting aside the millionaires tax revenue for the broad categories of education and transportation passed legal muster."

This is another ruse they're attempting to sell — that all that new revenue they hope to extract from "millionaires" will be spent on "education and transportation."  They quietly added "subject to appropriation by the Legislature" — because initiative petitions are constitutionally forbidden from appropriating money.  They could have just as deceptively promised a unicorn for every family, or a pot of gold at the end of every rainbow — "subject to appropriation by the Legislature"!

All revenue that comes into the state treasury is deposited into the state's general fund, from which the Legislature alone makes appropriations to fund government.  The tax-borrow-and-spend cabal cannot make any promises of how or where that new revenue would be spent.

Saying otherwise is simply a deception, a lie, a scam.

CLT has defeated assaults on fair taxation before; past grad tax assaults have been defeated by the voters every time, in 1962, 1968, 1972, 1976, and 1994.  With your support, if need be we're ready to take on a sixth assault.

Chip Ford


 

State House News Service
Wednesday, September 2, 2015

Hurdles remain, but 2016 ballot question landscape is taking shape
By Matt Murphy


Twenty petitions proposing new laws that would, among other things, legalize recreational marijuana, expand the state's authority to license charter schools and protect whales from fishing nets, passed their first legal test after Attorney General Maura Healey on Wednesday certified the initiative petitions, clearing a path toward the 2016 ballot.

Healey also certified two proposed amendments to the state constitution that would impose a higher income tax on earnings over a million dollars to help fund education and transportation and another clarifying that no part of the constitution requires public funding of abortion.

The citizen-generated constitutional amendments have a longer road to the ballot than the other petitions, requiring at least a quarter of the Legislature to back the measures in 2016 and again in the 2017-2018 session before they could possibly appear before voters in 2018.

The coalition behind last fall's successful campaign to mandate paid, earned sick time for most workers across Massachusetts are now pushing a constitutional amendment to tax millionaires an additional 4 percent on earnings above $1 million. Though ballot questions are prohibited from allocating money to specific programs, Healey determined that the language setting aside the millionaires tax revenue for the broad categories of education and transportation passed legal muster.

In her review of the constitutionality of the proposed ballot questions, Healey knocked 10 petitions off the list, essentially taking them out of play for next year's elections unless her decisions get challenged by proponents in the Supreme Judicial Court.

Petitions that were not certified deal with the proposed legalization of fireworks, an attempt to regulate corporate campaign contributions, the definition of a "public body," and a planned study of radiation health and safety risks.

Reflecting discontent with their inability to pass bills through the Legislature, groups earlier this summer filed 35 separate petitions proposing 26 new laws and nine constitution amendments. The number of filings this year were the most since 1994 when 42 petitions were filed and seven eventually made it to the ballot.

The next step in the process requires proponents of the individual ballot petitions to collect by late November 65,760 valid signatures in order to refer the petition to the Legislature for consideration. The Secretary of State's office must make the signature sheets available to petitioners no later than Sept. 16, but some groups said they expected they would available sooner.

"We've been given the green light to proceed, and what happens next is up to you!" wrote Agatha Bodwell, the signature drive director for the campaign to force Massachusetts to withdraw from the Common Core curriculum standards.

The Massachusetts Business Alliance for Education issued a statement expressing disappointment in Healey's decision to certify the Common Core repeal petition, calling it a "legally dubious question" to put before voters.

"This [is] a reckless and irresponsible ballot measure that would turn back the clock on critical improvements that the majority of teachers and principals support. It would cause mass confusion in our schools, undo the hard work of thousands of Massachusetts educators and put our children far behind their peers in other states," said Linda Noonan, the executive director of the alliance, in a statement.

Another successful petitioner - The Humane Society of the United States - cheered their clearance of the legal hurdle on the path to the 2016 ballot. The Humane Society is one of the groups behind a proposed ballot question that would outlaw the "extreme confinement" of farm animals. The measure is opposed by some farming groups who say the types of cages targeted by animal rights activists are not used in Massachusetts, and argue that the petition would drive up food prices by restricting the sale of meat and dairy products from other states where the cages might be used.

"We're heartened to have the opportunity to begin talking with Massachusetts voters about how they can help prevent animal cruelty, promote food safety and aid family farmers by signing petitions to put this measure on next year's ballot," said Stephanie Harris, Massachusetts state director of The Humane Society of the United States.

Other ballot questions progressing forward include multiple proposals by competing groups to legalize recreational marijuana, Secretary of State William Galvin's proposal to reform the state's public records laws, petitions dealing with euthanasia of animals in shelters, and a worker's rights petitions that would require fast food restaurants and retail stores to pay an employee one to four hours of extra pay whenever it changes that employee's work schedule within 14 days of a scheduled work shift.

Four separate questions drafted by two different groups to legalize recreational marijuana were all certified on Wednesday, raising the specter of potentially two ballot questions regarding pot going before voters in 2016.

Jim Borghesani, a spokesman for the Campaign to Regulate Marijuana Like Alcohol, said his group has not reached any agreement with Bay State Repeal, the other group with three different proposals, on combining forces.

"We're pleased and looking forward to the signature drive and making a compelling case to the people of Massachusetts," Borghesani said.

A group of charter school, business and education advocates also got the green light to move ahead with a petition to allow the Board of Elementary and Secondary Education to authorize up to 12 new public charter schools or existing school expansions each year. While the proposed change would leave existing caps on charter school seats by district in place, the board could license charter schools in excess of the cap in certain districts if it determines the need for choice is great enough.

During an unrelated event at Boston City Hall, Mayor Martin Walsh said he was a charter school supporter and said he had discussed the issue a couple of weeks ago during a meeting with Gov. Charlie Baker.

"I would much rather increase the cap through the legislative process and not through the ballot question initiative," Walsh said, suggesting a bill crafted on Beacon Hill would be a more precise way to make sure cap increases occur in communities that need them.

Antonio Caban contributed reporting


The Boston Globe
Thursday, September 3, 2015

AG rejects proposed ballot question on fireworks
Healey certifies ballot initiatives on taxes, marijuana
By Jill Terreri Ramos


Attorney General Maura Healey on Wednesday declared that ballot initiatives to raise taxes on the wealthy, legalize marijuana, and create restrictions aimed at curbing cruelty to farm animals should be allowed to move forward.

But she rejected proposals legalizing fireworks and seeking to limit the influence of corporate spending in elections.

The fireworks petition sought to end the state ban on the possession and sale of consumer fireworks. But Healey’s office ruled that the measure would also repeal parts of state law regulating any explosive material, not just fireworks, and that the parts of the petition were not substantially related, which could lead to confusion for voters.

The initiative’s proponent, former state representative Richard Bastien of Gardner, said Wednesday he was surprised by Healey’s decision and would push for approval of fireworks sales through the Legislature. If lawmakers don’t act, he said, he would file the initiative again in 2018.

Petitions to legalize another banned substance, recreational marijuana, were approved. Two groups are supporting separate measures, meaning that Massachusetts voters could see two ballot questions on the topic in 2016.

One group, the Campaign to Regulate Marijuana Like Alcohol in Massachusetts, is pushing for highly regulated production facilities and retail outlets, and additional taxes on marijuana sales. It is also calling for residents to be able to grow a small amount of marijuana in their homes and for adults to possess up to an ounce of marijuana.

“If Massachusetts can successfully regulate and tax alcohol, it can successfully regulate and tax a less harmful substance like marijuana,” said campaign manager Will Luzier.

Bay State Repeal is not looking to impose additional regulations on marijuana and would not create a bureaucracy or impose taxes in addition to sales taxes, said spokesman Steve Epstein. The proposal would also not limit the amount of marijuana cultivated in private homes for personal use.

On Wednesday, representatives of both groups said they would move forward separately.

Supporters of higher taxes on incomes greater than $1 million will move forward with petitions calling for a constitutional amendment. Similar ballot measures have failed five times, the last in 1994. The current proposal would scrap the flat state income tax — everyone currently pays at a rate of 5.15 percent — and create a two-tiered system, with all earnings over $1 million taxed at a rate 4 percentage points higher.

A measure backed by the Humane Society of the United States and the Massachusetts Society for the Prevention of Cruelty to Animals, which would make it illegal for Massachusetts businesses to sell some meat and eggs from animals kept in small crates, was also certified. Opponents have said it would hurt family farms and raise prices.

Two union-backed proposals that would boost insurance payments to small hospitals and lower payments to large ones were also certified. Service Employees International Union 1199 maintains that its proposals would level the playing field between institutions run by Partners’ Healthcare and community hospitals.

A proposed law to strengthen access to public records filed by Secretary of State William F. Galvin was also certified. Galvin has said he would prefer the Legislature to act on its own — and that he would withdraw the ballot initiative if it does so. Galvin’s measure would decrease the cost of black and white copies to 15 cents per page, allow citizens to recover attorney’s fees if an agency is found to be withholding public records in bad faith, and institute fines of up to $1,000 for public officials that improperly deny access to records.

In all, more than 30 initiative petitions were filed. Healey’s rulings Wednesday were just one step in a long process to put the measures before state voters.

Supporters of certified petitions must now collect tens of thousands of signatures. Supporters of petitions that were not certified can appeal to the Supreme Judicial Court, which has the last word. Opponents to the ballot initiatives can also challenge the measures in court.

The group Pass Mass Amendment, which is trying to pass a constitutional amendment declaring that corporations are not people and that money is not speech, filed six petitions, in the hope that one would be acceptable to the attorney general. The group was among the disappointed petitioners Wednesday. A similar petition was rejected by former attorney general Martha Coakley’s office.

“They’re saying again that corporations are individuals,” said organizer Nicholas J. Bokron. “It just doesn’t make sense.” The group is planning to go ahead with collecting signatures and is hoping for a different ruling in court.

Initiative petitions aimed at reducing euthanasia in animal shelters, ending Common Core education standards, and increasing access to charter schools were also certified.

The Massachusetts Business Alliance for Education stated its opposition to the proposal to end Common Core. The group, which is funded by businesses and foundations, said it hasn’t decided whether it would challenge the initiative in court, said Executive Director Linda Noonan.

A constitutional amendment stating that nothing in the constitution should be “construed as requiring the public funding of abortion,” was also certified.


WGBH PBS TV-2
Wednesday, September 2, 2015

Healey Gives Stamp Of Approval For Million-Dollar Tax,
Marijuana Legalization Ballot Questions
By Mike Deehan


Your 2016 Massachusetts ballot might turn out to be a crowded one, after Attorney General Maura Healey signed off Wednesday on almost two dozen ballot questions that could be headed for public approval when voters go to the polls in 2016.

Healey certified that 22 potential ballot initiatives meet the constitutional standards for appearing on the ballot, setting up several proposals that could develop into big campaigns for 2016.

Voters could get a chance to decide on a change to the income tax rate where people who make over $1 million a year would be taxed at a higher rate on the amount over $1 million, with the additional state revenue dedicated to education and transportation.

"What this ballot question would do is require anyone in Massachusetts who makes more than a million dollars a year — and that's not many people — to pay an additional four percentage points on their income tax, and that money would be dedicated to improving our public school sour roads and bridges and our public transportation," Steve Crawford, a spokesman for the group Raise Up Massachusetts, told WGBH News Wednesday.

Expect resistance to the million-makers' tax from the anti-tax increase crusaders at Citizens for Limited Taxation, the group that's been fighting any kind of graduated income tax in Massachusetts for decades. Though Healey's sign-off certifies that the question's language meets the requirements set out in the state constitution for initiatives, opponents could still argue that it violates certain provisions of the constitution itself.

There are also questions on marijuana legalization that would pit two very different policies against each other: one question would fully legalize the drug for those over — with few regulatory strings attached — while another would legalize and heavily tax it just like we do now with booze.

Jim Borghesani from the Campaign to Regulate Marijuana Like Alcohol doesn't see the two measures coming into conflict until much further down the road.

"It's not a complication until both ballot measures actually make the ballot," Borghesani said. "So I think that question is better asked when we know who has been successful in collecting the required amount of signatures, which is a tall task."

But the Georgetown, Mass., attorney behind the competing initiative, Massachusetts Cannabis Reform Coalition founder Stephen Epstein, says he won't back down in the face of the less radical proposal. Epstein wants to wait and see which proposal gains more traction with voters before election day.

"If I were them, and we're polling as well as they are, to save face nationally, they better jump on our bandwagon," Epstein said.

Even so, it's unlikely both questions could co-exist on the 2016 ballot recommending different marijuana policies.

Healey rejected several potential ballot initiatives, mostly on constitutional grounds. These include questions on limiting political spending, radiation health risks and government accountability.

Another victim of Healey's decisions is the burgeoning campaign to legalize fireworks and sparklers in the state. The petition from former Gardner Rep. Richard Bastien turned out to be a dud in Healey's eyes because it covered too much policy ground. Bastien's petition not only loosened restrictions on fireworks, it would have rewritten the state's law on how all explosives could be transported. Healey ruled that the transportation topic was not associated closely enough to the main topic of fireworks, so the petition didn't meet the definition of a proper ballot question.

"Obviously, [I] disagree with today's decision to not certify our petition," Bastien told WGBH News in an email. "Our position is that all of the provisions are germane and necessary to legalizing consumer fireworks."

Campaigns behind the questions will have to gather over 75,000 more signatures in order to secure a place on the 2016 ballot.


The Boston Globe -- West edition
Wednesday, August 6, 2015

The Argument: Should the state adopt the proposed tax on top earners to raise money for education and transportation?

YES


State Representative Jay R. Kaufman
A Lexington Democrat, House chairman of the Joint Committee on Revenue



Our roads, bridges, and public transit systems are desperately in need of investment.

Many children in the Commonwealth don’t get the preschool education that is the single greatest key to later success.

Visit our public colleges and you’ll find crumbling buildings and students accumulating unsustainable debt.

Look at our tax system and you’ll find that 80 percent of us — anyone making less than $118,000 — pay around 10 percent of household income in state and local taxes, while the wealthiest pay half that rate, under 5 percent.

On Nov. 6, 2018, we’ll have a chance to change all this.

We’ll vote on an amendment to the state’s Constitution so that we can have a fairer tax system and a more sustainable way to raise the revenues we need for the Commonwealth we want. We’ll consider a proposal for a 5 percent tax rate on income under $1 million and an additional 4 percent on income over $1 million. Funds raised from this new tax bracket will be reserved for critical education and transportation investments.

Unlike most states, we have a constitutionally-mandated flat tax. That means when we need to raise revenue for any of our public services or investments, we have no choice but to increase sales or property taxes or raise the statewide income tax rate. Any of these puts a disproportionate weight on the poor and middle class, while the wealthiest feel the pinch the least.

More than unfair, our current tax system is unsustainable. Standard & Poor’s, not exactly an organ of the liberal left, has concluded that the nation’s wealth and income divide poses a significant danger to the long-term economic health of states. The credit-rating authority affirms that states like Massachusetts with a flat income tax have one less critical tool for addressing that unfairness and unsustainability.

I am confident that we are bigger than the “just say ‘no’ to taxes” or “you can’t trust politicians” noise that will certainly complicate the healthy debate we need. I am confident, too, that a majority of us will conclude that we need and deserve good public services and fairer tax system. I welcome the conversations we’ll have between now and 2018.

NO

State Representative Kevin J. Kuros
An Uxbridge Republican whose district also includes Bellingham, Blackstone, and Millville


While it’s no laughing matter, attempts to implement a Massachusetts graduated income tax feel like the Bill Murray movie “Groundhog Day.’’ In the movie, Murray’s character is trapped in a time warp, doomed to relive the same day over and over. Similarly, in 2018 voters may once again have to relive efforts to change the state Constitution to allow a progressive income tax rate.

Article 44 requires taxes “be levied at a uniform rate throughout the Commonwealth upon incomes derived from the same class of property.” Clearly, the Constitution’s framers understood a uniform tax rate means those earning more pay correspondingly more. Taxing at higher rates punishes success while doing little to help the less fortunate.

Proponents want to “modernize” the Constitution and implement a progressive tax on those earning over $1 million annually. I contend the Constitution has it correct, for several reasons:

First, $1 million is an arbitrary number requiring regular updating to reflect inflation. Presently, it is about 30 times the per capita average. In 1780 when per capita income was $400, the cap would’ve been $12,000. How often would we have had to amend our Constitution to “modernize” it since then?

Second, not all income is created equally. Many small-business owners operate as a sole proprietorship or as an S-corporation. From a tax perspective, their business revenue looks like income, so an owner with $2 million in revenue and $1.95 million in expenses would be taxed at the higher rate despite profiting only $50,000. This is inequitable to small-business owners, who create two out of every three jobs in Massachusetts.

Finally, if the objective is to close an income inequality gap, let’s consider the earned income tax credit. The fiscal 2016 budget increases the Massachusetts credit from 15 to 23 percent of the federal credit, allowing 400,000 qualifying residents an annual credit of up to $1,412. This has an immediate impact on reducing income inequality, can be easily updated by the Legislature, and doesn’t require a constitutional amendment.

Voters rejected previous graduated tax efforts in 1962, 1968, 1972, 1976, and 1994. I trust that groundhog day will repeat at the polls in 2018.


Globe West commentary
Wednesday, September 2, 2015

Taxing top earners: Round 2


Each of the two primary arguments made by Rep. Kevin Kuros (R-Uxbridge) against the question “Should the state adopt the proposed tax on top earners to raise money for education and transportation?” (Aug. 9) depends on a significant factual error. The tax referenced in the question is in a proposed constitutional amendment that would establish a new 4 percent tax applying only to that portion of a taxpayer’s income that is in excess of $1 million. The new revenues would be used for essential investments in public education and transportation.

First, the proposed measure will NOT require regular updating to reflect inflation, as Rep. Kuros claims. The proposed constitutional amendment itself provides for annual adjustments in the million dollar threshold to reflect increases in the cost of living.

Second, Rep. Kuros argues that the measure will unfairly impose the additional tax on small business owners, if their business has revenues of over a million dollars, even if most of that revenue goes to cover the business’s expenses. But in fact, a small businessperson is taxed on profits, not revenue. So in Rep. Kuros’s example, a businessperson with $2 million in revenue but only $50,000 of profit would only report $50,000 of income (not $2 million) and would be unaffected by the new tax, unless he or she had more than $950,000 of other taxable income.

Currently, while the rest of us pay roughly 10 percent of our incomes in state and local taxes, the wealthiest residents pay only about 6.5 percent. The proposed constitutional amendment would make our Commonwealth’s tax system fairer and will provide critically needed revenues for important investments in preschool, public education, our state colleges and universities, and roads, bridges, and public transportation.

John A. Lippitt
Reading
Member of the Leadership Team
Progressive Democrats of Massachusetts
http://www.progressivemass.com/20237


Rep. Kuros responds:

I wanted to clarify some confusion over my recent opinion piece opposing the proposed graduated income tax. First, I objected to including an arbitrary number such as $1 million in our Constitution, requiring regular updates to reflect inflation. While the proponents have included an automatic escalator in the final language of their ballot question, my piece was written before the final language was published. I falsely assumed that the proponents would agree that our Constitution is bigger than including language to address specific tax thresholds, which should be left to legislative policy.

Second, I wanted to better explain the example I cited for the potential tax impact for small businesses (S-Corps and Sole proprietorships). Many owners draw only a reasonable salary, say $50,000, out of their business each year and reinvest the bulk of their profits back into the business. However, an owner who sets $1 million in profits from her business aside in a capital account, for future expansion or to guard for a rainy day, will pay the increased tax rate if her salary plus capital reserves exceed $1 million in a year even if her personal salary is a modest $50,000. This effectively becomes a tax on savings in the year the capital assets are set aside.

Finally, while most businesses won’t leave the US over tax policy, many will leave a state over tax policy. Currently, business owners with a combined $1 million in salary and capital savings in a year in Massachusetts pay 5.15 percent income tax on the amount over $1 million. In Rhode Island, they pay 5.99 percent. In Connecticut, 6.7 percent. In Maine, they pay 7.95 percent, in New York, 8.82 percent and in Vermont, they pay 8.95 percent. If the ballot question passes, the same owner will pay 9.15 percent in Massachusetts, moving us from first to worst. It’s just bad policy. Vote NO.

State Representative Kevin J. Kuros
An Uxbridge Republican whose district also includes Bellingham, Blackstone, and Millville

 

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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