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CLT UPDATE
Wednesday, June 7, 2017
Freezing Out the Taxpayers –
Again
After-Action Report by Chip Faulkner, CLT Communications
Director
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Depending on
who you ask, freezing the state’s income tax rate would
either be an insult to taxpayers who voted for it to be
lowered or it would allow the state to protect the
services elected officials say their constituents are
constantly crowing about.
Though those
lines were drawn Tuesday when the Revenue Committee
heard testimony on a bill (H 1618) to hold the income
tax rate at 5.1 percent, the state’s confoundingly slow
revenue growth and unsettled fiscal situation could
render the debate moot....
Rep. Denise
Provost said her bill would prevent that loss of revenue
at a time when lower-than-projected tax collections have
torn a $439 million revenue hole in the current budget
while forcing lawmakers to reconsider spending plans
they’ve drawn up for fiscal 2018.
“We are all
struggling to deal with cuts in all areas of the budget.
I hear constantly from constituents that they want
funding maintained or increased,” Provost, a Somerville
Democrat, said. “I never ever hear from constituents
saying they want lower taxes or that their taxes are too
high now.” ...
But to Chip
Faulkner, spokesman for Citizens for Limited
Taxation, Provost’s bill is “an affront to the
taxpayers and the people who voted for the ballot
question in 2000 which had a three-step reduction in the
state income tax down to 5 percent.”
In 2000,
voters approved a ballot question -- with about 60
percent in favor -- that would have marked the income
tax rate down to 5 percent by 2003. But in 2002,
Democrats in the Legislature raised taxes, nullifying
the planned reduction in the income tax rate and setting
it on its current trigger schedule.
“Here we are
in 2017 still talking about the reduction,” Faulkner
said. “It was so many years and we’re still talking
about this.”
The ballot law
adopted in 2000 would have set the income tax rate,
which was 5.95 percent as of Sept. 1, 1999, at 5.6
percent for tax year 2001, 5.3 percent for tax year
2002, and 5 percent for tax year 2003 and the ensuing
years.
Though the
Revenue Committee will have the first say on Provost’s
bill and freezing the income tax rate through standalone
legislation, the freeze could happen even without their
input.
State House
News Service
Wednesday, June 7, 2017
Budget talks on Beacon Hill could put
state income tax cut in play
Lest any taxpayer believe that Beacon Hill wants to raise taxes
only on the ultra-wealthy via a “millionaire’s tax” (as we wrote on
this page yesterday) some lawmakers are also pushing a bill that
would freeze current tax rates for all individual taxpayers.
A “freeze” in this case would be the same as a tax increase.
At the State House yesterday, the Joint Committee on Revenue took
testimony on a bill that would freeze the current income tax rate at
5.1 percent. Massachusetts voters had ordered that the rate be
rolled back to 5 percent — 17 years ago.
It has been an infuriating back-and-forth since the 2000 vote,
with lawmakers eventually agreeing to automatic reductions in the
tax rate should revenue hit certain benchmarks. There are just a few
more ticks of the meter left to go —from 5.1 percent to, finally, 5
percent....
Supporters of the millionaire’s tax have sought to frame their
campaign as a simple matter of fairness, arguing the burden will be
felt only by the state’s wealthiest residents. Their simultaneous
effort to increase the burden on all taxpayers belies that claim.
A Boston Herald editorial
Wednesday, June 7, 2017
Double talk on taxes
State lawmakers, especially those of the Democratic persuasion,
are fairly salivating over an upcoming vote on a proposed income tax
surcharge that would take anywhere from $1.6 billion to $2.2 billion
out of the pockets of Massachusetts taxpayers.
The measure needs only one more round of approval by the state
House and Senate meeting in Constitutional Convention — likely next
week — before it could go on the November 2018 ballot.
And while it’s billed as a 4 percent surtax on “millionaires,” it
would also cut into the earnings of many small businesses — yes, the
prime generators of new jobs in the region.
Gov. Charlie Baker said in a WCVB-TV interview aired Sunday,
“There are a lot of people that have spent that millionaire’s tax
six ways to Sunday already, and it hasn’t even made it to the ballot
yet.
“I think what we ought to do is focus on what we need to do to
balance out fiscal ’17, which ends in about a month, and put a
balanced budget in place for fiscal ’18 and not go back to the
taxpayers thinking that they should be the source of all our
solutions.”
Ah, if only he could convince Democrats in the Legislature of the
wisdom of that. But living within the state’s means has never been
their strong suit....
But then the economics of taxation isn’t their strong suit
either. Spending, yep, that’s what they’re good at.
A Boston Herald editorial
Tuesday, June 6, 2017
Dems failing economics
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Chip Faulkner's CLT
Commentary
So there I was, before
the Joint Committee on Revenue once again. The setting was
room B-1 in the bowels of the State House yesterday, June
6th. It was the anniversary of the D-Day landing and some
legislators were landing on the people paying taxes in
Massachusetts. A bill —
H1618 — to halt our income tax rate rollback at 5.1% and
prevent it from going down to 5% was on the agenda. I
arrived at the hearing and grabbed a seat before the 1:00 pm
start; there were about 50 people there to either testify or
watch the proceedings.
Several attendees
testified on other bills before I got my chance to jump in on H1618 at
around 2:15. Before I did, however, in walked Rep. Denise Provost
(D-Somerville) along with her fellow legislator Mary Keefe (D-Worcester)
to speak in favor of the freeze. Her testimony was brief, but one
comment she made stood out.
The Somerville Democrat
said the money that would go back to the taxpayers is “foregone
revenue.” In other words it would be a waste to let the average
person keep more in their wallets instead of having the state government
take it!
Rep. Keefe said she
never hears from any of her constituents that they want lower taxes.
Unfortunately, Representative you are wrong — and I have
the
statistics to prove it. Rep. Keefe represents a section of
Worcester. When the income tax rollback was on the 2000 ballot,
Worcester gave it a 58% “yes” vote. Unless her district was completely
out of sync with the rest of the city, her constituents sent a message
loud and clear that they wanted lower taxes.
My testimony reiterated
what CLT had stated in our memo to the Revenue Committee, “Déjà vu all over again.” To
wit: The fact that the tax hike was passed in 1989 as a “temporary
measure” for supposedly 18 months and in 2017 (twenty–eight years later)
it’s STILL not down to 5%. Even after CLT, in frustration, went to the
ballot — and won overwhelmingly in 2000 — to bring it down to 5% they
still stalled. To add insult to injury, the Legislature froze the
rollback in 2002 at 5.3% and used some tedious economic formula to
slowly bring it down to its present 5.1% — over 15 years, no less.
I particularly enjoyed
waving the page in our news release that showed
excerpts from about a dozen newspapers in 1989 describing the tax
hike as “temporary” and for only “18 months.” Once I finished, Chairman
Kaufman (D-Lexington) asked the committee if they had any questions for
me. The silence was deafening.
A personal observation: There are 17 members on the Joint Committee on
Revenue — eleven State Representatives and six State Senators. However,
only four House members
of
"The Best Legislature Money Can Buy"
were there for the hearing.
Fill in your own line on that.
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Listen to Chip Faulkner’s testimony before the committee
here: |
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Chip Faulkner
Communications Director |
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State House News Service
Wednesday, June 7, 2017
Budget talks on Beacon Hill could put state income tax cut
in play
By Colin A. Young
Depending on who you ask, freezing the state’s income tax
rate would either be an insult to taxpayers who voted for it
to be lowered or it would allow the state to protect the
services elected officials say their constituents are
constantly crowing about.
Though those lines were drawn Tuesday when the Revenue
Committee heard testimony on a bill (H 1618) to hold the
income tax rate at 5.1 percent, the state’s confoundingly
slow revenue growth and unsettled fiscal situation could
render the debate moot.
Since 2002, the income tax rate has been on a schedule to
decrease by 0.5 percent each year until it is set at 5
percent, but only if economic conditions allow. State budget
officials expect the rate to drop from 5.1 percent to 5.05
percent effective Jan. 1, 2018 -- resulting in $83 million
less in revenue for state government but a slight dose of
tax relief for workers.
Rep. Denise Provost said her bill would prevent that loss of
revenue at a time when lower-than-projected tax collections
have torn a $439 million revenue hole in the current budget
while forcing lawmakers to reconsider spending plans they’ve
drawn up for fiscal 2018.
“We are all struggling to deal with cuts in all areas of the
budget. I hear constantly from constituents that they want
funding maintained or increased,” Provost, a Somerville
Democrat, said. “I never ever hear from constituents saying
they want lower taxes or that their taxes are too high now.”
Worcester Rep. Mary Keefe, who joined Provost to testify in
support of the rate freeze Tuesday, said the average
taxpayer benefits from the 0.05 percent rate reductions to
the tune of about $30. She said she asks constituents in
Worcester if they realized they got a tax cut.
“They say, ‘what are you talking about?’ They’re astounded,
they don’t even know,” she said. Keefe added that she then
asks people if they would be willing to contribute that $30
to their local library or school system, “And of course they
are.”
But to Chip Faulkner, spokesman for Citizens for
Limited Taxation, Provost’s bill is “an affront to the
taxpayers and the people who voted for the ballot question
in 2000 which had a three-step reduction in the state income
tax down to 5 percent.”
In 2000, voters approved a ballot question -- with about 60
percent in favor -- that would have marked the income tax
rate down to 5 percent by 2003. But in 2002, Democrats in
the Legislature raised taxes, nullifying the planned
reduction in the income tax rate and setting it on its
current trigger schedule.
“Here we are in 2017 still talking about the reduction,”
Faulkner said. “It was so many years and we’re still talking
about this.”
The ballot law adopted in 2000 would have set the income tax
rate, which was 5.95 percent as of Sept. 1, 1999, at 5.6
percent for tax year 2001, 5.3 percent for tax year 2002,
and 5 percent for tax year 2003 and the ensuing years.
Though the Revenue Committee will have the first say on
Provost’s bill and freezing the income tax rate through
standalone legislation, the freeze could happen even without
their input.
Though budget officials have said they expect the economic
conditions to allow for an income tax rate reduction,
official word will not come until fiscal 2017 ends.
Last August, Department of Revenue Commissioner Michael
Heffernan announced that the necessary economic triggers had
not been met in fiscal 2016 to reduce the income tax rate in
2017 -- the first year since 2013 that the tax rate had not
ticked down.
Six lawmakers began meeting Monday morning to reconcile the
House and Senate’s roughly $40.3 billion spending plans for
fiscal year 2018, which were built on the assumption that
state tax receipts will grow 3.9 percent in fiscal 2018.
The governor’s budget office has acknowledged that revenue
projections for fiscal 2018 will have to be revised downward
amid slower growth. Budget writers could grab about $83
million of revenue for the fiscal 2018 budget if they
reverse their projection that tax cut triggers will be hit
or otherwise decide that they would like to put off the tax
cut. The triggers are based in part on growth in
inflation-adjusted baseline tax revenues.
The Boston
Herald
Wednesday, June 7, 2017
A Boston Herald editorial
Double talk on taxes
Lest any taxpayer believe that Beacon Hill wants to raise
taxes only on the ultra-wealthy via a “millionaire’s tax”
(as we wrote on this page yesterday) some lawmakers are also
pushing a bill that would freeze current tax rates for
all individual taxpayers. A “freeze” in this case would
be the same as a tax increase.
At the State House yesterday, the Joint Committee on Revenue
took testimony on a bill that would freeze the current
income tax rate at 5.1 percent. Massachusetts voters had
ordered that the rate be rolled back to 5 percent — 17 years
ago.
It has been an infuriating back-and-forth since the 2000
vote, with lawmakers eventually agreeing to automatic
reductions in the tax rate should revenue hit certain
benchmarks. There are just a few more ticks of the meter
left to go —from 5.1 percent to, finally, 5 percent.
But a small group of progressive lawmakers is doing its best
to disrespect the will of the voters, backing legislation
that would freeze the rate at 5.1 percent. How long would
the rate stay there? Well, the bill filed by Democratic
Reps. Denise Provost (Somerville), Jonathan Hecht
(Watertown), Mary Keefe (Worcester), and Mike Connolly
(Cambridge) doesn’t say — so assume “forever” at the
earliest, or until they can convince their colleagues to
start moving it back up.
It’s true that state tax revenues are lagging. May tax
collections were $30 million ahead of projections, but
collections for the year are still $439 million short of the
expectations upon which spending was built. The slowdown is
blamed on a number of factors, including wage stagnation and
taxpayers delaying stock sales and other big financial moves
in hopes of beneficial federal tax reforms.
Oh, but it is so much easier to look to the revenue side of
the ledger for a solution.
Supporters of the millionaire’s tax have sought to frame
their campaign as a simple matter of fairness, arguing the
burden will be felt only by the state’s wealthiest
residents. Their simultaneous effort to increase the burden
on all taxpayers belies that claim.
The Boston Herald
Tuesday, June 6, 2017
A Boston Herald editorial
Dems failing economics
State lawmakers, especially those of the Democratic
persuasion, are fairly salivating over an upcoming vote on a
proposed income tax surcharge that would take anywhere from
$1.6 billion to $2.2 billion out of the pockets of
Massachusetts taxpayers.
The measure needs only one more round of approval by the
state House and Senate meeting in Constitutional Convention
— likely next week — before it could go on the November 2018
ballot.
And while it’s billed as a 4 percent surtax on
“millionaires,” it would also cut into the earnings of many
small businesses — yes, the prime generators of new jobs in
the region.
Gov. Charlie Baker said in a WCVB-TV interview aired Sunday,
“There are a lot of people that have spent that
millionaire’s tax six ways to Sunday already, and it hasn’t
even made it to the ballot yet.
“I think what we ought to do is focus on what we need to do
to balance out fiscal ’17, which ends in about a month, and
put a balanced budget in place for fiscal ’18 and not go
back to the taxpayers thinking that they should be the
source of all our solutions.”
Ah, if only he could convince Democrats in the Legislature
of the wisdom of that. But living within the state’s means
has never been their strong suit. And when you can label
something a “millionaire’s tax,” well, some folks are
actually going to think that’s just a fine way to do
business in this state.
Apparently few Democrats on Beacon Hill see the irony in
courting an industry giant like General Electric then
whacking its executives with a whopping new bill for
creating jobs *here*.
But then the economics of taxation isn’t their strong suit
either. Spending, yep, that’s what they’re good at.
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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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