|
Help save yourself
— join CLT
today! |
CLT introduction and membership application |
What CLT saves you from the auto excise tax alone |
Make a contribution to support
CLT's work by clicking the button above
Ask your friends to join too |
Visit CLT on Facebook |
Barbara Anderson's Great Moments |
Follow CLT on Twitter |
CLT UPDATE
Wednesday, October 4, 2017
Grad Tax: Fight's On!
|
Proponents of an income surtax on high
earners face a new challenge as opponents, led by large
business groups, are going to court in a bid to derail a
constitutional amendment calling for a 4 percent surtax on
annual household income above $1 million per year.
A complaint filed with the Supreme Judicial
Court Tuesday by officials from the Massachusetts High
Technology Council, Massachusetts Taxpayers Foundation and
Associated Industries of Massachusetts alleges the proposal
itself is unconstitutional and violates three requirements
and restrictions on the content of ballot questions featured
in Article 48 of the state Constitution.
"It is really important to understand that
this lawsuit is not about whether creating a new graduated
income tax is good public policy or bad public policy, it is
about the way that it is being done, which we find to be so
clearly flawed and unconstitutional that it is alarming,"
Chris Anderson, president of the high tech council and
former chairman of the state Board of Education, said in a
statement....
State House News Service
Tuesday, October 3, 2017
Biz groups file challenge with SJC in bid to derail income
surtax
The plaintiffs also note that it is critical
to understand the difference between typical initiative
petitions (also referred to as ballot questions) that amend
state statutes, which voters are accustomed to seeing, and
this ballot question that would change the Massachusetts
Constitution and strip the Legislature of its ability to
easily amend the policy in the future. Only three initiative
petitions to amend the Constitution have ever appeared on
the ballot....
● It combines three
unrelated subjects: it establishes a graduated income tax,
and mandates spending the money raised only on education and
transportation. These three parts are not mutually dependent
or related and for this reason violate Article 48’s ban on
“logrolling,” a strategy by which an unpopular provision is
joined with a popular provision making it more likely they
both will pass. Here, the filers of the proposed initiative
petition are seeking to pass the unpopular graduated income
tax – rejected by Massachusetts voters five times in its
history – by combining it with the popular causes of funding
for education and transportation.
● The second legal flaw
is that it improperly allocates funding. Article 48
specifically bars initiative petitions that “make a specific
appropriation of money from the treasury” and this one would
require that all revenue raised by the new tax be spent
“only” on education and transportation. This usurps the
Legislature’s sole Constitutional authority to set state
spending policy....
“Here is the bottom line,” concluded
Anderson. “On five occasions since 1915, Massachusetts
citizens have considered ballot initiatives that would
empower the Legislature to establish a graduated income tax
and the citizens rejected all five. In this latest attempt,
the proponents have decided not to propose authorizing the
Legislature to adopt a graduated income tax. They have
decided to impose it through the initiative petition,
amending the Constitution. As a key element of the strategy,
they have logrolled it by including two attractive subjects
that would receive the funding. And they have limited the
set of people who would be impacted. This would set a bad
precedent for Massachusetts, which will likely lead to
future amendments to the Constitution by other special
interest groups. This time it is about those making over a
million dollars, what’s next?”
Rasky Partners, Inc.
News Release
Tuesday, October 3, 2017
Graduated Income Tax Unconstitutional According to Lawsuit
Filed With SJC
In a statement, the proposal's primary
backer, Raise Up Massachusetts, blasted the groups behind
the lawsuit as corporate lobbyists looking to deny state
residents' right to vote.
“It’s a shame that a few dozen of the
richest individuals in Massachusetts are hiding behind
secretive corporate lobby organizations like the High Tech
Council and the Massachusetts Taxpayer Foundation to oppose
the Fair Share Amendment,” said Lew Finfer, a Raise Up
co-chair....
"I think that we have a strong case,
particularly with respect to the related matters issue,"
said Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation and a plaintiff in the lawsuit. "It
seems (previously) that the court has found that issues that
seem more related than these are unrelated."
In the complaint, business leaders attempt
to use the words of high-ranking Massachusetts lawmakers who
support the tax against them. Politicians have admitted the
proposal is designed to use increases in transit and
education revenue to overcome the unpopularity of graduated
income taxes, according to the lawsuit.
For instance, the complaint quotes Senate
President Stan Rosenberg as saying the millionaires tax
“will stand a better chance of being approved” than past
attempts to introduce a graduated income tax because “it is
focused specifically on money for education and
transportation.” Joint Committee on Revenue chair Jay
Kaufman and Joint Ways and Means Committee chair Karen
Spilka are similarly quoted.
Boston Business Journal
Tuesday, October 3, 2017
Business groups ask state court to kill 'millionaires tax'
proposal
Business groups have emerged as leading
opponents to the proposed surcharge, known as the Fair Share
Amendment. They say it could chase away employers and
undermine the progress toward making the state a more
friendly place to do business....
“Essentially, if this ballot initiative is
allowed to go forward, we’re saying voters have the power to
raise revenue and appropriate it,” said Eileen McAnneny,
president of the Massachusetts Taxpayers Foundation. “It
kind of becomes the Wild West of budgeting.”
The Raise Up Massachusetts coalition — which
is largely union-funded but also includes community and
religious groups — is pushing the ballot measure as a
constitutional amendment. The state’s constitution does not
now allow for a graduated income tax such as the proposed
surcharge on top earners.
The coalition is also championing two other
ballot questions for the 2018 elections that aim to change
state law but not its constitution. One is a mandate for
paid family leave; the other is a requirement to raise the
minimum wage to $15 an hour....
If the business groups can’t persuade the
court to block the so-called millionaires tax, both sides
will likely wage costly campaigns to win over voters during
the 2018 election season.
The Boston Globe
Tuesday, October 4, 2017
Business groups go to SJC to challenge ‘millionaires tax’
proposal
“Constitutional amendments are extremely
rare, and none have been proposed to impose a specific tax
rate on a specific class of taxpayer in our state
constitution,” said Christopher Anderson, one of the
lawsuit’s plaintiffs and president of the High Tech Council.
“When you amend the constitution, you
prevent the Legislature from touching it. The process of
setting taxing and spending policy via amendments will open
the floodgates to a series of constitutional amendments,”
Anderson said.
The Boston Herald
Wednesday, October 4, 2017
Coalition sues to block tax
Seeks to halt ballot question
Wealthy people aren’t the only ones who
should be grateful for this effort; Massachusetts voters who
five times have rejected a graduated income tax now
have someone protecting their interests. Same for those who
understand that it’s a terrible idea to give high-income
earners an incentive to flee for friendlier states....
The question combines unrelated subject
matters, which is not permitted, the suit argues, and
“plainly” amounts to logrolling — pairing an unpopular
measure (a tax increase) with a popular one (higher spending
on roads and schools) to improve its chances of passage.
Article 48 also prohibits “specific
appropriations” by initiative petition, the suit points out.
Supporters of the amendment slapped a fig leaf over the
spending part of the question, but their intent is plain.
The plaintiffs also argue that Article 48
should be construed to forbid setting a specific tax rate in
the state constitution, which can not be amended by
lawmakers. To allow it would be “a radical decentralization
of fiscal policy away from the Legislature.”
In their zeal to advance the question to the
2018 ballot revenue-hungry lawmakers may not have considered
these nuanced points. But presumably they were considered —
and astonishingly, rejected — by Attorney General Maura
Healey, who permitted the question to proceed. The matter is
now in the hands of the state’s highest court, which lucky
for taxpayers has no particular dog in this fight.
A Boston Herald editorial
Wednesday, October 4, 2017
Time out on tax hike
|
|
Chip Ford's CLT
Commentary
In its
lawsuit challenging the constitutionality of the
proposed Graduated Income Tax filed yesterday, in its brief
before the court the taxpayer-plaintiffs argue in part:
"If,
by its decision in this case, the Court allows a
radical decentralization of fiscal policy away from
the Legislature, it will set the stage for future
initiatives from a range of interest groups
proposing constitutional amendments segregating
funds for their preferred causes, or raising tax
rates on some groups and lowering taxes on others."
You can bet the farm that this is precisely the intent
of this sixth and latest scheme to impose a graduated income
tax. If the tax-borrow-and-spend Gimme Cabal ever
manages to crack the constitutional flat-tax barrier the
gates to the commonwealth will be thrown wide open and
— what's new?
— the victorious barbarians
will demand more, more, always more until they've taken
every cent from every one of us, one at a time.
I can't help but think back to the quotation by the Rev.
Martin Niemöller, a Nazi concentration
camp victim, that laid out the inevitable progression:
First they came
for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak
out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for
me.
I'll keep my commentary brief today as there's much
information here to digest and contemplate. On its
merits, I believe arguments against this proposed
constitutional amendment are strong, even irrefutable.
I can only hope the character and principles of the justices
on state's highest court are equally so. But, this
is the Massachusetts Supreme Judicial Kangaroo Court and
we've been disappointed by it before.
You can read and/or download the entire brief now before
the court
here.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
|
State House News Service
Tuesday, October 3, 2017
Biz groups file challenge with SJC in bid to
derail income surtax
By Michael P. Norton
Not so fast.
Proponents of an income surtax on high earners
face a new challenge as opponents, led by large
business groups, are going to court in a bid to
derail a constitutional amendment calling for a
4 percent surtax on annual household income
above $1 million per year.
A complaint filed with the Supreme Judicial
Court Tuesday by officials from the
Massachusetts High Technology Council,
Massachusetts Taxpayers Foundation and
Associated Industries of Massachusetts alleges
the proposal itself is unconstitutional and
violates three requirements and restrictions on
the content of ballot questions featured in
Article 48 of the state Constitution.
"It is really important to understand that this
lawsuit is not about whether creating a new
graduated income tax is good public policy or
bad public policy, it is about the way that it
is being done, which we find to be so clearly
flawed and unconstitutional that it is
alarming," Chris Anderson, president of the high
tech council and former chairman of the state
Board of Education, said in a statement.
Another plaintiff, Dan O'Connell, served in
former Gov. Deval Patrick's administration and
now leads the Massachusetts Competitive
Partnership. O'Connell is concerned the measure
will cause "irreparable damage" to the state's
economy by discouraging employers from growing
locally, according to the complaint.
Supporters of the union-backed measure say it
will protect most taxpayers from seeing any tax
increase while generating roughly $2 billion in
revenue that they say would be invested in
education and transportation, areas of spending
that are a priority for many lawmakers as well
as the business community.
In response to the complaint, the Raise Up
Coalition alleged that high tech council member
companies "have received at least $144 million
in tax breaks and other incentives from the
State of Massachusetts and local communities,
and the average annual compensation of chief
executives whose companies received public
benefits is $12.3 million.
"Instead of supporting the Fair Share Amendment
and the benefits that a well-educated workforce
and a more reliable transportation system will
create for their employees, their businesses,
and our entire economy, these wealthy corporate
executives are fighting the people's right to
vote, just to save themselves a small amount of
money on their own personal income taxes," said
Cindy Rowe, director of the Jewish Alliance for
Law and Social Action.
The challenge to the proposal was expected and
its filing ensures that the high court will be
the next battleground over the surtax.
The complaint, prepared by Kevin Martin of
Goodwin Procter, challenges Attorney General
Maura Healey's certification of the petition as
ballot eligible and seeks to enjoin Secretary of
State William Galvin from placing the measure on
the ballot in November 2018.
The plaintiffs allege that the constitutional
amendment impermissibly violates a
constitutional provision requiring that
initiative petitions only address "related" or
"mutually dependent" subjects. The proposal, the
plaintiffs say, combines unrelated subjects by
establishing a graduated income tax structure
and also mandating that funds raised through the
tax increase only be spent on education and
transportation.
"An important reason for this restriction is to
prevent 'logrolling,' the process by which an
unpopular provision is joined in a single
initiative petition with a popular provision,
making it more likely that both will pass," the
complaint said. "Yet logrolling is plainly why
the Challenged Initiative combines a graduated
income tax - an idea that has been rejected five
times by Massachusetts voters - with increased
spending on two currently-popular, but
unrelated, causes."
The challenge also asks the court to toss the
question on the grounds that it allegedly
improperly allocates funding, allowing a
"radical decentralization of fiscal policy away
from the Legislature" and setting a precedent
that "will set the stage for future initiatives
from a range of interest groups proposing
constitutional amendments segregating funds for
their preferred causes, or raising tax rates on
some groups and lowering taxes on others."
Article 48 bans "specific appropriations" by
initiative petition, according to the complaint,
and the state's highest court in 1937 excluded a
petition that sought to designate funds "only"
for specific purposes.
The complaint also cited a 1937 high court
ruling to back up its claim that "the Court
should hold that initiative petitions cannot be
used to take control over revenue generation
away from the Legislature via a tax set in the
Constitution."
The income surtax proposal has received the two
consecutive affirmative votes required from the
Democrat-controlled Legislature to reach the
2018 ballot.
Republican lawmakers resisted the measure as it
moved though the Legislature; Republican Gov.
Charlie Baker has opted against taking a
position on it.
The Raise Up Coalition expressed confidence that
the amendment will withstand the legal
challenge. The legal team defending the
amendment includes Kate Cook, head of the
government law practice group at Sugarman,
Rogers, Barshak & Cohen and the former chief
legal counsel for Gov. Patrick; Lisa Goodheart,
partner at Sugarman Rogers and former president
of the Boston Bar Association, and Northeastern
University Law Professor Peter Enrich.
Rasky Partners, Inc.
News Release
Tuesday, October 3, 2017
Graduated Income Tax Unconstitutional According
to Lawsuit Filed With SJC
October 3, 2017 – Boston, MA – A group of
Massachusetts business and fiscal policy leaders
representing a range of traditional and
well-established employers, innovative start-ups
and small and owner-operated businesses
throughout the Commonwealth today filed a
complaint with the Supreme Judicial Court,
challenging an initiative petition recently
certified for the 2018 Massachusetts ballot. The
initiative petition at issue in the complaint
seeks to amend the state Constitution to impose
a new graduated income tax, adding a new four
percent tax (representing an 80% increase in the
personal income tax rate) on all incomes over $1
million and dictating how the revenue must be
spent. The plaintiffs assert that the proposal
contains numerous constitutional violations. It
cynically and improperly combines a graduated
income tax that in the past has been rejected
each and every time by Massachusetts voters,
with attractive spending in a prohibited
manipulation of the vote called “logrolling.”
And it does something that has never been done
before: never in the history of Massachusetts
has a tax or tax rate been set in the
Constitution, making the new tax essentially
permanent and unchangeable.
The five plaintiffs lead organizations that
represent the full breadth of the Massachusetts
economy and are united in their commitment to
ensuring that the Commonwealth continues to
foster conditions that support job development
and economic growth. They are: Christopher
Anderson, President of the Massachusetts High
Technology Council, Inc. (MHTC); Christopher
Carlozzi, Massachusetts State Director of the
National Federation of Independent Business (NFIB);
Richard Lord, President and Chief Executive
Officer of Associated Industries of
Massachusetts (AIM); Eileen McAnneny, President
of the Massachusetts Taxpayers Foundation (MTF);
and, Daniel O’Connell, President and Chief
Executive Officer of the Massachusetts
Competitive Partnership (MACP). The named
defendants in the lawsuit are Attorney General
Maura Healey and Secretary of State William
Galvin.
“It is really important to understand that this
lawsuit is not about whether creating a new
graduated income tax is good public policy or
bad public policy, it is about the way that it
is being done, which we find to be so clearly
flawed and unconstitutional that it is
alarming,” said Chris Anderson of the MHTC,
speaking on behalf of the plaintiffs. “We would
be equally opposed if they were proposing the
opposite and trying to roll back the income tax
and cut funding for education or transportation.
Amending the Constitution to achieve taxing and
spending by popular vote is just a terrible
idea, and could undo much of the good work that
Massachusetts has done in terms of creating a
successful economic climate.”
The plaintiffs also note that it is critical to
understand the difference between typical
initiative petitions (also referred to as ballot
questions) that amend state statutes, which
voters are accustomed to seeing, and this ballot
question that would change the Massachusetts
Constitution and strip the Legislature of its
ability to easily amend the policy in the
future. Only three initiative petitions to amend
the Constitution have ever appeared on the
ballot.
The plaintiffs’ complaint, prepared and filed by
attorney Kevin Martin of Goodwin Procter,
outlines three critical ways in which the
proposal violates the requirements and
restrictions of Article 48 of the Massachusetts
Constitution – which specifies the limits of the
initiative petition process – and is therefore
unconstitutional.
●
It combines three unrelated subjects: it
establishes a graduated income tax, and mandates
spending the money raised only on education and
transportation. These three parts are not
mutually dependent or related and for this
reason violate Article 48’s ban on “logrolling,”
a strategy by which an unpopular provision is
joined with a popular provision making it more
likely they both will pass. Here, the filers of
the proposed initiative petition are seeking to
pass the unpopular graduated income tax –
rejected by Massachusetts voters five times in
its history – by combining it with the popular
causes of funding for education and
transportation.
● The second
legal flaw is that it improperly allocates
funding. Article 48 specifically bars initiative
petitions that “make a specific appropriation of
money from the treasury” and this one would
require that all revenue raised by the new tax
be spent “only” on education and transportation.
This usurps the Legislature’s sole
Constitutional authority to set state spending
policy.
● The third
constitutional problem is that Article 48 does
not authorize the use of an initiative petition
to set taxes in the Constitution, outside of the
Legislature’s control. Never in the history of
the Commonwealth has a tax or a tax rate been
set in the Constitution.
“Here is the bottom line,” concluded Anderson.
“On five occasions since 1915, Massachusetts
citizens have considered ballot initiatives that
would empower the Legislature to establish a
graduated income tax and the citizens rejected
all five. In this latest attempt, the proponents
have decided not to propose authorizing the
Legislature to adopt a graduated income tax.
They have decided to impose it through the
initiative petition, amending the Constitution.
As a key element of the strategy, they have
logrolled it by including two attractive
subjects that would receive the funding. And
they have limited the set of people who would be
impacted. This would set a bad precedent for
Massachusetts, which will likely lead to future
amendments to the Constitution by other special
interest groups. This time it is about those
making over a million dollars, what’s next?”
Boston Business Journal
Tuesday, October 3, 2017
Business groups ask state court to kill
'millionaires tax' proposal
By Greg Ryan
Leaders of five Massachusetts business advocacy
groups are asking the state’s highest court to
prevent the so-called “millionaires tax”
proposal from going before voters, arguing that
it sets aside tax revenue in a way that is
unconstitutional.
The proposal, which is set to appear on the
ballot in November 2018, would raise state
income taxes for those making $1 million or more
a year by four percentage points. It would
reserve those tax dollars for two purposes:
transit and schools.
The heads of five of the state’s most
high-profile business groups are filing the
suit: the Massachusetts High Technology Council,
Associated Industries of Massachusetts,
Massachusetts Taxpayers Foundation,
Massachusetts Competitive Partnership and the
state chapter of the National Federation of
Independent Business.
In a statement, the proposal's primary backer,
Raise Up Massachusetts, blasted the groups
behind the lawsuit as corporate lobbyists
looking to deny state residents' right to vote.
“It’s a shame that a few dozen of the richest
individuals in Massachusetts are hiding behind
secretive corporate lobby organizations like the
High Tech Council and the Massachusetts Taxpayer
Foundation to oppose the Fair Share Amendment,”
said Lew Finfer, a Raise Up co-chair.
The lawsuit contends that the Massachusetts
Constitution bars any ballot initiative from
making a “specific appropriation” of state
funding, according to a copy of the complaint
that is expected to be filed with the Supreme
Judicial Court on Tuesday. It points to a 1937
SJC ruling that barred an initiative from
requiring that certain revenue be spent “only”
on highways.
By the same token, tax increases are supposed to
be limited to the Legislature, not inserted into
the constitution through a ballot question,
according to the lawsuit.
“The result will be that the Legislature is left
with little control over both taxes and
spending, making its constitutional duty to
produce a balanced budget increasingly difficult
to perform,” the complaint said.
The lawsuit also argues that the proposal’s
tying together of three unrelated topics — an
income-based surtax, education funding and
transportation funding — is barred by the
Massachusetts constitution. Lawmakers long ago
expressed a desire to prevent “logrolling,” or
the combination of a popular proposal with an
unpopular one, in a ballot question, according
to the suit.
"I think that we have a strong case,
particularly with respect to the related matters
issue," said Eileen McAnneny, president of the
Massachusetts Taxpayers Foundation and a
plaintiff in the lawsuit. "It seems (previously)
that the court has found that issues that seem
more related than these are unrelated."
In the complaint, business leaders attempt to
use the words of high-ranking Massachusetts
lawmakers who support the tax against them.
Politicians have admitted the proposal is
designed to use increases in transit and
education revenue to overcome the unpopularity
of graduated income taxes, according to the
lawsuit.
For instance, the complaint quotes Senate
President Stan Rosenberg as saying the
millionaires tax “will stand a better chance of
being approved” than past attempts to introduce
a graduated income tax because “it is focused
specifically on money for education and
transportation.” Joint Committee on Revenue
chair Jay Kaufman and Joint Ways and Means
Committee chair Karen Spilka are similarly
quoted.
The defendants in the case are Attorney General
Maura Healey, who found last month that the
proposal is constitutional, as well as Secretary
of the Commonwealth William Galvin, in order to
prevent him from putting the proposal on the
ballot.
Raise Up is expected to involve itself in the
case in some way, though it is not yet clear in
what capacity.
The Boston Globe
Tuesday, October 4, 2017
Business groups go to SJC to challenge
‘millionaires tax’ proposal
By Jon Chesto
Five powerful business groups on Tuesday filed a
legal challenge with the state Supreme Judicial
Court aimed at blocking a 2018 ballot question
that would impose an added tax on the state’s
highest earners.
Under the union-backed ballot measure,
Massachusetts residents who make more than $1
million a year would pay a 4 percentage point
surcharge on top of the state’s personal income
tax, currently 5.1 percent. The additional tax
money — estimated at $2 billion annually — would
be earmarked for spending on transportation and
education.
Business groups have emerged as leading
opponents to the proposed surcharge, known as
the Fair Share Amendment. They say it could
chase away employers and undermine the progress
toward making the state a more friendly place to
do business.
In the lawsuit, the groups focus on legal
arguments that they believe show the ballot
initiative is unconstitutional.
First, the business groups say, the question
improperly links unrelated subjects: a graduated
income tax and spending on transportation and
education.
Second, they maintain that by dictating how
extra tax revenue must be allocated, the
initiative limits the Legislature’s ability to
decide on spending, violating a state
constitutional prohibition on making “specific
appropriations” by initiative petition.
Finally, the groups argue that initiative
petitions should not be used to take taxation
authority away from the Legislature.
Chris Anderson, president of the Massachusetts
High Technology Council, said he expects that
the high court will hold oral arguments on the
case by early next year, with a decision likely
sometime in the spring.
“If I were voting on something, I would want to
make sure the courts have already reviewed that
what I’m voting on is actually constitutional,”
said Anderson, one of the plaintiffs.
The other groups represented in the suit are the
National Federation of Independent Business,
Associated Industries of Massachusetts, the
Massachusetts Taxpayers Foundation, and the
Massachusetts Competitive Partnership.
They are suing Attorney General Maura Healey to
overturn her office’s certification of the
ballot question and Secretary of State William
Galvin to block his office from placing the
measure on the ballot in November 2018.
“Essentially, if this ballot initiative is
allowed to go forward, we’re saying voters have
the power to raise revenue and appropriate it,”
said Eileen McAnneny, president of the
Massachusetts Taxpayers Foundation. “It kind of
becomes the Wild West of budgeting.”
The Raise Up Massachusetts coalition — which is
largely union-funded but also includes community
and religious groups — is pushing the ballot
measure as a constitutional amendment. The
state’s constitution does not now allow for a
graduated income tax such as the proposed
surcharge on top earners.
The coalition is also championing two other
ballot questions for the 2018 elections that aim
to change state law but not its constitution.
One is a mandate for paid family leave; the
other is a requirement to raise the minimum wage
to $15 an hour.
“We’re not surprised that they have filed this
last-ditch legal effort to keep this off the
ballot,” coalition spokesman Steve Crawford said
of the business groups’ action. “But their
arguments are inconsistent with the positions
they’ve advanced for years — that the foundation
of our economy is based on a sound
transportation system and investments in
education.”
If the business groups can’t persuade the court
to block the so-called millionaires tax, both
sides will likely wage costly campaigns to win
over voters during the 2018 election season.
Anderson, of the high tech council, cited the
corporate exodus under way in Connecticut — in
the last two years, General Electric, Aetna, and
Alexion Pharmaceuticals all decided to move
their headquarters out of that state — and
called it a warning for Massachusetts.
“We’ve heard that we’ve made a lot of progress
eliminating the Taxachusetts label,” Anderson
said. “What we’re looking at is how do we
prevent Massachusetts from becoming Connecticut
in a New York minute.”
But University of Massachusetts Dartmouth public
policy professor Michael Goodman said the tax on
high earners would likely be a plus for the
state’s economy. He said research has shown that
added taxes on top earners don’t generally cause
them to move elsewhere. The benefits — new money
for schools, roads, and trains — would outweigh
the costs, he said.
“We’ve seen [economic] expansion in
Massachusetts under higher tax environments,”
Goodman said. “[But] there are clearly
constraints on our ability to grow presented by
our transportation infrastructure and our K-12
through higher ed system, which are not being
funded adequately.”
The Boston Herald
Wednesday, October 4, 2017
Coalition sues to block tax
Seeks to halt ballot question
By Marie Szaniszlo
A coalition of business groups yesterday filed
suit in the state’s highest court to try to
block the proposed “millionaire tax”
constitutional amendment from making it on the
2018 ballot.
In a 77-page lawsuit filed in the Supreme
Judicial Court, the heads of the Massachusetts
High Technology Council, the National Federation
of Independent Businesses, the Massachusetts
Competitive Partnership, Associated Industries
of Massachusetts and the Massachusetts
Taxpayers Foundation challenge state Attorney
General Maura Healey’s 2015 certification of the
proposed amendment as constitutional.
That certification cleared the way for two votes
by the state Legislature — one in 2016, the
other in June — to allow voters to decide next
year whether Bay Staters should be subject to a
4 percent surtax on any portion of their income
that exceeds $1 million.
“Constitutional amendments are extremely rare,
and none have been proposed to impose a specific
tax rate on a specific class of taxpayer in our
state constitution,” said Christopher Anderson,
one of the lawsuit’s plaintiffs and president of
the High Tech Council.
“When you amend the constitution, you prevent
the Legislature from touching it. The process of
setting taxing and spending policy via
amendments will open the floodgates to a series
of constitutional amendments,” Anderson said.
In a statement yesterday, Emily Snyder, a
spokeswoman for Healey, said: “We believe our
office made the right call in certifying this
question in accordance with the constitutional
requirements. We look forward to defending this
decision in court.”
In addition to arguing that the process is
unconstitutional, Anderson said the proposed
amendment, if it passes, would create a
“competitive disadvantage” that would be
difficult for Massachusetts to recover from.
“All of the organizations (that are plaintiffs)
are totally committed to job and economic growth
for the commonwealth,” he said. “We’ve made
great progress from the ‘Taxachusetts’ days of
20 years ago when we had high tax rates,
declining state tax revenue and rising
unemployment.”
The proposed amendment would affect about 19,600
residents, or 0.5 percent of all state
taxpayers, officials say.
Studies suggest that a minority of those people
will move to states with lower tax rates, but
the majority will choose to stay.
The Service Employees International Union, one
of the measure’s chief proponents, did not
return a call seeking comment last night.
But the union and other supporters, who call the
proposal the Fair Share Amendment, have said it
would raise an extra $2 billion annually, which
the state would have to spend on education,
transportation and infrastructure.
The Boston Herald
Wednesday, October 4, 2017
A Boston Herald editorial
Time out on tax hike
An alliance of business groups is poking sharp
holes in the effort to establish a millionaire’s
tax in Massachusetts, arguing in a new lawsuit
not just that the proposed constitutional
amendment is bad policy (it is) but that it is
constitutionally flawed and should not have been
certified to appear on the 2018 ballot.
Wealthy people aren’t the only ones who should
be grateful for this effort; Massachusetts
voters who five times have rejected a
graduated income tax now have someone protecting
their interests. Same for those who understand
that it’s a terrible idea to give high-income
earners an incentive to flee for friendlier
states.
The millionaire’s tax, which has been on greased
skids on Beacon Hill since labor unions and
community advocates first drafted it, would
enshrine in the state constitution a 4 percent
surcharge on income above $1 million, with the
funds earmarked for education and
transportation.
The lawsuit filed by an array of business groups
asserts that the question violates Article 48 of
the state constitution, which governs the
initiative petition process, and asks the
Supreme Judicial Court to block it from
appearing on the 2018 ballot.
The question combines unrelated subject matters,
which is not permitted, the suit argues, and
“plainly” amounts to logrolling — pairing an
unpopular measure (a tax increase) with a
popular one (higher spending on roads and
schools) to improve its chances of passage.
Article 48 also prohibits “specific
appropriations” by initiative petition, the suit
points out. Supporters of the amendment slapped
a fig leaf over the spending part of the
question, but their intent is plain.
The plaintiffs also argue that Article 48 should
be construed to forbid setting a specific tax
rate in the state constitution, which can not be
amended by lawmakers. To allow it would be “a
radical decentralization of fiscal policy away
from the Legislature.”
In their zeal to advance the question to the
2018 ballot revenue-hungry lawmakers may not
have considered these nuanced points. But
presumably they were considered — and
astonishingly, rejected — by Attorney General
Maura Healey, who permitted the question to
proceed. The matter is now in the hands of the
state’s highest court, which lucky for taxpayers
has no particular dog in this fight. |
| |
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
BACK TO CLT
HOMEPAGE
|