 |
and the
Citizens Economic Research Foundation
Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(508)
915-3665
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
44 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Thursday, January 11, 2018
DeLeo blinks: No new
"broad-based" taxes
|
With the
first crack at next year's budget -- the version written by
Gov. Charlie Baker -- due in 16 days, it's still too soon to
decide if new taxes should be on the table, House Speaker
Robert DeLeo said Monday. "Much too early to discuss that
at all," DeLeo said when asked about the possibility of new
taxes or tax hikes in fiscal 2019.
Two years ago, DeLeo and his then-Ways and Means Chairman
Brian Dempsey offered an earlier guarantee of no tax
increases in the fiscal 2017 budget, ruling them out in
December 2015.
State House News Service
Monday, January 8, 2018
DeLeo: "Too early" to rule out tax increases in state budget
The Massachusetts Republican Party on
Tuesday issued a politically-charged statement in response
to remarks made by House Speaker Robert DeLeo regarding the
potential for new taxes.
The Winthrop Democrat told reporters that it
is “much too early to discuss” the possibility of a tax
hike, as Republic Governor Charlie Baker has until January
24 to roll out a state budget.
In a press release featuring the subject
line “Dems Again Fail to Protect Taxpayers,” the
Massachusetts GOP accused DeLeo and the Democratic Party of
“refusing to rule out tax increases on hardworking
Massachusetts families, continuing an abysmal session that
has seen them accomplish little beyond a pay raise for
themselves.”
MassGOP Chairman Kirsten Hughes in a
prepared statement said “Beacon Hill Democrats just won’t
learn.”
Using last January’s pay raise vote as a
reminder, Hughes added that “after a year where they
achieved next to nothing except a massive pay hike for
themselves, they’re already floating the idea of new taxes
on hardworking families.”
The New Boston Post
Tuesday, January 9,2018
Massachusetts GOP Blasts Beacon Hill Dems Over Tax
Uncertainty
On Monday, after the weekly sit-down of the
governor and the legislative leadership, House Speaker Bob
DeLeo, the unindicted co-conspirator, was asked if new taxes
were on the table in FY 2019.
“Much too early to discuss that at all,” he
snapped.
Really? DeLeo said this a few days after the
Department of Revenue announced that December tax
collections came in $527 million above projections. The
commonwealth collected more than $3 billion in taxes that
month — in other words, over $100 million a day.
Six months into the fiscal year, state tax
collections are running $728 million above estimates for the
year.
But grabbing $100 million a day is not
enough, apparently. It never is. Because these hacks have a
disease. They are taxaholics, and they need a 12-step
program of their very own. They could have meetings, but
they would need a big room, probably Gardner Auditorium.
“One tax is too many,” the payroll patriots
could all chant together, “and a thousand are not enough.”
So they’re not ruling out more tax
increases, and this is even before the scheduled referendum
question on the statewide ballot in November asking the
voters to impose a graduated income tax on themselves.
The Boston Herald
Wednesday, January 10, 2018
Hacks can’t help selves on taxes
By Howie Carr
House Speaker Robert DeLeo this week said it
is “much too early” to discuss the possibility of tax hikes
or new taxes in next year’s budget. With all due respect to
the speaker, it’s never too early to acknowledge — even
better when revenues are on the upswing — that taxpayers
ought to be inoculated against a legislative raid on their
wallets.
In recent years DeLeo has been among the
first to rule out tax increases as a way to balance the next
year’s budget — much to the consternation of more liberal
House members and the Senate president. As the State House
News Service points out it was in December 2015, six months
before the start of fiscal 2017, that DeLeo and his former
Ways and Means Chairman Brian Dempsey made a very public
point of taking new taxes off the table....
Meanwhile, given the performance of the last
two years — when spending authorized by lawmakers outpaced
revenues, leading to a mid-year mess — we can understand why
DeLeo would want to approach the budget cautiously.
But such caution, we would argue, is best
exercised on the spending side of the ledger.
A Boston Herald editorial
Wednesday, January 10, 2018
Put kibosh on tax talk
Taxpayers might be getting a break on their
federal returns this year, but they likely won't get one
from the state.
For the second consecutive year,
Massachusetts’ personal income tax rate remains unchanged.
Revenue collections did not grow enough in the last year,
despite a robust economy and low unemployment, to trigger a
small income tax cut. As a result, the levy will remain at
5.1 percent in 2017.
The stagnant tax rate has rekindled debate
on Beacon Hill over a voter referendum, passed nearly a
decade ago [sic-nearly two decades ago], that called on the
state to lower the personal income tax.
In 2000, voters overwhelmingly approved a
ballot question to cut the then-5.95 tax rate to 5 percent.
Two years later, legislators froze the rollback at 5.3
percent to plug budget gaps and added a mechanism allowing
the rate to fall only if growth in annual revenues met
certain benchmarks.
A tax cut has been triggered four times in
the past decade, most recently in 2016 when it fell .05
percent to the current level.
Taxpayer advocates have blasted lawmakers
for defying voters, and say the rate should have dropped to
5 percent years ago.
"The fact that almost two decades later
we're still not down to 5 percent is appalling," said
Chip Faulkner, a spokesman for the group Citizens for
Limited Taxation. "The Legislature should be totally
ashamed of itself for refusing to lower the rate to the
level mandated by voters."
He said Democrats have repeatedly failed to
honor the will of voters. Republican lawmakers have sought
for several years to lower the rate by legislation, but
their proposals are stymied in the Democratic-controlled
Legislature.
Senate Minority Leader Bruce Tarr, a
Gloucester Republican, has filed a tax rate rollback bill
for the past several legislative sessions.
Lawmakers who oppose dropping the rate argue
that the state would take a major hit that would mean less
money for public schools, transportation and other needs.
Fixing it at 5 percent would mean a roughly
$500 million loss to the state, according to the Department
of Revenue.
"We have this debate year after year, when
tax bills and the budget comes up, but most members vote
largely against reducing it to 5 percent, as the voters
asked for," said House Minority leader Brad Jones, R-North
Reading, the main sponsor of a tax rollback bill in the
House. "It's unfortunate."
Rep. Jim Lyons, R-Andover, said voters
should be outraged that the state hasn't yet lowered the
rate to 5 percent.
"The hardworking people of Massachusetts
live under constant fear of the Democrats wanting to raise
taxes and take more money from them," he said.
Meanwhile, House Speaker Robert DeLeo has
refused to rule out tax increases as the Legislature gets to
work on next fiscal year's budget....
Faulkner said Democratic leaders would be ill-advised
to consider raising taxes, especially after "voting
themselves an $18 million pay raise last year."
"They just can't seem to control their
appetite for more spending and higher taxes," he said. "The
taxpayers are an afterthought."
The Salem News
Wednesday, January 10, 2018
Steady income tax raises Republicans' ire
House Speaker Robert A, DeLeo is vowing
there will be no new "broad-based" taxes in the House budget
in the coming fiscal year, suggesting taxpayers won't face
any added costs in the next round of state budget
negotiations.
DeLeo also suggested that House lawmakers
could pursue changes to the state's tax code in wake of the
federal tax reform law passed by Congress.
The Winthrop Democrat's comments have often
been a key indicator of how taxation will be approached each
budget cycle on Beacon Hill, where a fiscally conservative
Republican is governor while the more liberal Senate has
shown a bigger appetite for more revenue.
"The House will not be proposing any new
broad-based taxes in its budget," DeLeo said in a statement
released by his office. He also noted a Jan. 23 hearing the
Committee on Revenue is hosting to discuss possible changes
to the state's own tax code in wake of the federal changes,
which, among a range of other things, now cap state and
local tax deductions at $10,000.
DeLeo said the House is "exploring options
to mitigate negative repercussions" for Massachusetts
taxpayers, with a focus on the so-called "SALT cap."
The Boston Herald
Thursday, September 11, 2018
DeLeo signals no major tax hikes on the horizon
The new tax law’s limit on the state and
local tax deduction may pose a fiscal threat to high-tax
states and their affluent taxpayers. But it’s also a
political gift to Democratic officials in those states
seeking to raise their national profiles by challenging
President Donald Trump and circumventing the law.
For Democratic leaders in New York, California and New
Jersey, finding state-level workarounds to the new tax code
could deliver on a pocketbook issue for a key constituency:
voters in high-cost suburbs from Orange County, California,
to Westchester, New York, who are set to lose the most from
the SALT cap. Take New York Gov. Andrew
Cuomo: He’s called the SALT cap tantamount to “economic
civil war” as he lays the groundwork for a potential
Democratic primary bid in 2020. Like his counterparts in
California and New Jersey, he’s considering mechanisms for
taxpayers to fund state and local government with charitable
contributions that are then credited against their tax
liability; he’s also looking at a proposal to shift the tax
burden from income taxes to payroll taxes....
And the legality of the proposals, despite what advocates
say, remains untested. A group of a dozen tax law professors
and other experts included both principles in a paper of
workaround options circulated last month — titled “The games
they will play” — but
The Tax Foundation argued last week that because a
taxpayer is getting a one-for-one benefit for their
donation, it can’t be considered deductible.
Shifting to payroll taxes would be more complicated than the
donation idea, business leaders say. Critics note that it
would involve reducing wages for some workers and that its
benefits would vary by region. It would be a huge hassle
with little benefit for a manufacturing firm in Utica, say,
but a boon to a white-shoe law firm in Manhattan — and is
tripped up by union contracts and the state’s large
nonprofit sector. Politico
Tuesday, April 9, 2018
Blue states eye 'political gift' in tax workaround fight
with Trump
|
|
Chip Ford's CLT
Commentary
Well, well, well. Perhaps there was
some scheming going on over the Legislature's recent long,
extended holiday vacation after all. It seems that
House Speaker Robert DeLeo was more primed than usual that
it is time to hike taxes again.
Never mind that the Legislature has yet to
honor the voters' mandate of 2000 that its "temporary"
income tax hike of 1989 — the
Democrat majority's now 29-year brazen broken promise since
evaded despite even the voters' strict and overwhelming
order to roll it back to 5%. Going on three decades is
long enough to declare that tax hike for what it always was
and remains: An blatant lie from the start by a
group of liars who'll say and do whatever it takes to get
what they want.
DeLeo has almost always come out of the
session gate declaring that there will be no new taxes on
the House's agenda. It goes equally without saying
that tax hikes are always at the top of the "more liberal"
state Senate's agenda, especially under the past direction
of Senate President Stanley Rosenberg. (Only in
Massachusetts can something be called "more liberal" than
the state's House of Representatives.)
So when DeLeo dodges the media's question of
whether his House plans any tax hikes it is news.
And it remained news until he was forced to
back down, declare there are no new "broad-based" tax hikes
under consideration. With Stanley Rosenberg banished
to a basement office in the State House, it would be hard
for DeLeo to blame him for any tax hike talk.
According to the Boston Herald report:
"He also noted a Jan. 23 hearing the Committee on Revenue is
hosting to discuss possible changes to the state's own tax
code in wake of the federal changes, which, among a range of
other things, now cap state and local tax deductions at
$10,000."
Grab your wallets, folks!
The Legislature apparently is going down the
same rabbit hole as political leaders in other high-tax,
high-spending, Democrat-dominated states have desperately
plunged. They too are intent on protecting their
wealthiest state taxpayers by scheming to circumvent federal
tax policy — while
simultaneously plotting to soak the same taxpayers with a
state "millionaire's tax."
It’s a “good” tax if it benefits Beacon Hill.
According to a comprehensive report released
last Friday by non-partisan, Washington DC-based Tax
Foundation, these schemes appear to be a stretch of
credulity at best with potential IRS consequences on these
states' taxpayers.
In "State
Strategies to Preserve SALT Deductions for High-Income
Taxpayers: Will They Work?" the foundation analyzes in
detail how and why all the hare-brained schemes now being
concocted by states seeking to dodge the new federal tax law
are highly unlikely to succeed.
We'll be watching how DeLeo and "The Great
and General Court" contort themselves to evade federal taxes
at their Jan. 23 Revenue Committee hearing.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
|
State House News Service
Monday, January 8, 2018
DeLeo: "Too early" to rule out tax increases in
state budget
By Katie Lannan
With the first crack at next year's budget --
the version written by Gov. Charlie Baker -- due
in 16 days, it's still too soon to decide if new
taxes should be on the table, House Speaker
Robert DeLeo said Monday.
"Much too early to discuss that at all," DeLeo
said when asked about the possibility of new
taxes or tax hikes in fiscal 2019.
Two years ago, DeLeo and his then-Ways and Means
Chairman Brian Dempsey offered an earlier
guarantee of no tax increases in the fiscal 2017
budget, ruling them out in December 2015.
Baker has until Jan. 24 to file his fiscal 2019
budget proposal. The House Ways and Means
Committee, newly helmed by Rep. Jeffrey Sánchez
of Jamaica Plain, will put forward its own
version next, followed by the Senate.
Tax collections midway through fiscal 2018 are
shattering benchmarks by $728 million, and two
major tax policy questions are on track for
votes in November - a reduction in the sales tax
from 6.25 percent to 5 percent and a surtax of 4
percentage points on household income above $1
million.
Speaking to reporters after meeting privately
with Gov. Charlie Baker and Acting Senate
President Harriette Chandler, DeLeo pointed to
the budget and two other major pending pieces of
legislation as his priorities as the two-year
legislative session inches into its second year.
Chandler, who joined DeLeo and Baker for her
first leadership meeting since taking the reins
of the Senate last month, added in a priority of
her own as the speaker was ticking off the items
on his to-do list.
"I think probably some of the major items that
we'll be taking a look at will be the criminal
justice legislation, the health care legislation
-- " DeLeo said, referencing two bills that have
already cleared the Senate.
"Housing," Chandler interjected.
"Housing," DeLeo continued. "Believe it or not,
we're getting ready fairly soon to start the
budget debate. I know the governor later on this
month will be coming out with his budget, and
then it will be up to the House and then
obviously on to the Senate, so I think those are
probably three of the major items that we'll be
taking up."
Last week, presiding over the first formal
Senate session of 2018, Chandler said senators
would "fight for the future of the Massachusetts
family," in part by "ensuring that the spectrum
of housing in Massachusetts does not shut
anybody out."
The Senate passed a sweeping health care bill in
November, and Health Care Financing Committee
House Chairman Peter Kocot has said he's been
working on a bill for release early this year.
Both branches last year passed hefty criminal
justice reform packages that, among other
measures, eliminate some mandatory minimum
sentences. A six-member House-Senate conference
committee kicked off closed-door negotiation on
the differing bills on Dec. 18.
Declining to give a timeframe for a compromise,
DeLeo said he hoped a final bill could be sent
to Baker "as soon as possible."
"I agree with that one," Chandler said,
prompting a positive response from DeLeo.
"Good," DeLeo said. "Good, good."
The New Boston Post
Tuesday, January 9,2018
Massachusetts GOP Blasts Beacon Hill Dems Over
Tax Uncertainty
By Evan Lips
The Massachusetts Republican Party on Tuesday
issued a politically-charged statement in
response to remarks made by House Speaker Robert
DeLeo regarding the potential for new taxes.
The Winthrop Democrat told reporters that it is
“much too early to discuss” the possibility of a
tax hike, as Republic Governor Charlie Baker has
until January 24 to roll out a state budget.
In a press release featuring the subject line
“Dems Again Fail to Protect Taxpayers,” the
Massachusetts GOP accused DeLeo and the
Democratic Party of “refusing to rule out tax
increases on hardworking Massachusetts families,
continuing an abysmal session that has seen them
accomplish little beyond a pay raise for
themselves.”
MassGOP Chairman Kirsten Hughes in a prepared
statement said “Beacon Hill Democrats just won’t
learn.”
Using last January’s pay raise vote as a
reminder, Hughes added that “after a year where
they achieved next to nothing except a massive
pay hike for themselves, they’re already
floating the idea of new taxes on hardworking
families.”
“The broad support for Governor Baker’s fiscally
responsible approach to protecting taxpayers, as
well as Republicans’ gain of a key Democrat held
Senate seat last month should be a stark warning
for Democrats on Beacon Hill and their
colleagues running for governor who promise to
rubber-stamp massive new taxes.”
Last month, a little less than a week after
former state Senator Brian Joyce, a Democrat
from Milton, was indicted on federal money
laundering and racketeering charges, voters in
the Worcester and Middlesex Senate district
elected Fitchburg Republican Dean Tran to
succeed outgoing Democrat Jennifer Flanagan, who
left after being tapped by Baker to serve on the
new state Cannabis Control Commission.
Tran defeated Democrat Susan A. Chalifoux Zephir
by 676 votes in a special election that featured
15,693 votes cast overall — a far cry from the
more than 50,500 votes cast in 2014 when
Flanagan defeated Republican Richard M. Bastien
by a little more than 10,000 votes.
Flanagan ran unopposed in 2016 before being
named by Baker to a $120,000 job working on the
marijuana panel.
Tran’s win bumped the roster of Senate
Republicans to seven, compared to 33 Senate
Democrats.
The Boston Herald
Wednesday, January 10, 2018
Hacks can’t help selves on taxes
By Howie Carr
Sometimes, when something really bad happened at
the State House, I would ask the late Bob Crane
why anyone would do something that stupid, and
he always had the same answer:
“They can’t help themselves.”
They buried Bob in Wellesley yesterday, but
nothing has changed on Beacon Hill. They still
can’t help themselves.
On Monday, after the weekly sit-down of the
governor and the legislative leadership, House
Speaker Bob DeLeo, the unindicted
co-conspirator, was asked if new taxes were on
the table in FY 2019.
“Much too early to discuss that at all,” he
snapped.
Really? DeLeo said this a few days after the
Department of Revenue announced that December
tax collections came in $527 million above
projections. The commonwealth collected more
than $3 billion in taxes that month — in other
words, over $100 million a day.
Six months into the fiscal year, state tax
collections are running $728 million above
estimates for the year.
But grabbing $100 million a day is not enough,
apparently. It never is. Because these hacks
have a disease. They are taxaholics, and they
need a 12-step program of their very own. They
could have meetings, but they would need a big
room, probably Gardner Auditorium.
“One tax is too many,” the payroll patriots
could all chant together, “and a thousand are
not enough.”
So they’re not ruling out more tax increases,
and this is even before the scheduled referendum
question on the statewide ballot in November
asking the voters to impose a graduated income
tax on themselves.
In the hackerama, this proposal is described as
a “millionaire tax.” But rest assured, if it
passes, by 2021 at the latest you will be
defined as a “millionaire,” at least for the
purposes of paying state taxes, even if you only
make $40,000 a year.
Five times the hacks have tried to bamboozle the
taxpayers into picking their own pockets. Five
times they have failed. But it’s never over
until the hacks win, and this time could be the
charm. They’re not making voters as smart as
they used to, in case you haven’t noticed.
If the hacks succeed in jacking up the state
income tax from 5 percent to 9 percent, do you
suppose a lot of the “millionaires” of
Massachusetts have some contingency plan?
Like, say, moving?
Consider the strange case of Connecticut. The
Nutmeg State’s politicians can’t help themselves
either. They’ve been jacking up taxes right and
left for years, and the darnedest thing has
happened.
The supply of “millionaires” is falling. Go
figure.
Last week, the Hartford Courant reported that
last year alone 7,944 Connecticut tax-filers
fled to Florida. Their average income: $253,187
a year.
Connecticut’s top tax rate is 7 percent.
Florida’s is zero. Hmmm, why would all these
Connecticut residents suddenly pick the same
state to move to?
New Jersey has an even higher top tax rate —
8.97 percent. Meet David Tepper, a hedge-fund
billionaire, who lives in the Garden State, or
did, until he realized that when you make $3.5
billion a year, which he did in 2013, it might
be prudent to relocate to a state with no income
tax.
As the Republican leader of the New Jersey
Legislature said, “Who can blame him?”
This one guy Tepper moves to Miami Beach, and
The New York Times estimates he may have put a
$300 million hole in the New Jersey state
budget.
But these are just “anecdotes,” as Deval Patrick
used to say. Just because they’re voting with
their feet in New Jersey and Connecticut, our
“millionaires” won’t dare leave the, uh, Hub of
the Universe.
Gov. Charlie “Tall Deval” Baker basks in his
allegedly high favorability ratings. Apparently,
they never poll any MBTA commuters, who are
suffering through yet another winter from hell.
The new revenues will be spent wisely, on
education and transportation. The money will be
earmarked, wink wink nudge nudge.
Just ask Senate President Stanley Rosenberg — oh
that’s right, he’s not the president anymore.
He’s been banished to the State House basement,
that bourne from which no traveler does return.
Because this is the way it always ends on Beacon
Hill.
They can’t help themselves.
Order Howie’s new book, Kennedy Babylon, at
howiecarrshow.com
The Boston Herald
Wednesday, January 10, 2018
A Boston Herald editorial
Put kibosh on tax talk
House Speaker Robert DeLeo this week said it is
“much too early” to discuss the possibility of
tax hikes or new taxes in next year’s budget.
With all due respect to the speaker, it’s never
too early to acknowledge — even better when
revenues are on the upswing — that taxpayers
ought to be inoculated against a legislative
raid on their wallets.
In recent years DeLeo has been among the first
to rule out tax increases as a way to balance
the next year’s budget — much to the
consternation of more liberal House members and
the Senate president. As the State House News
Service points out it was in December 2015, six
months before the start of fiscal 2017, that
DeLeo and his former Ways and Means Chairman
Brian Dempsey made a very public point of taking
new taxes off the table.
Dempsey is off in the private sector now, and
this year the speaker appears to be reserving
his rights. That’s understandable, in part
because there are two ballot questions with huge
fiscal implications expected to go before voters
this year. If approved the millionaire’s tax
would unearth a gusher of new tax revenue —
while a hoped-for reduction in the sales tax
rate would leave a hole in the treasury. DeLeo
is leaving himself plenty of room for
negotiation on tax issues.
Meanwhile, given the performance of the last two
years — when spending authorized by lawmakers
outpaced revenues, leading to a mid-year mess —
we can understand why DeLeo would want to
approach the budget cautiously.
But such caution, we would argue, is best
exercised on the spending side of the ledger.
The Salem News
Wednesday, January 10, 2018
Steady income tax raises Republicans' ire
By Christian M. Wade, Statehouse Reporter
Taxpayers might be getting a break on their
federal returns this year, but they likely won't
get one from the state.
For the second consecutive year, Massachusetts’
personal income tax rate remains unchanged.
Revenue collections did not grow enough in the
last year, despite a robust economy and low
unemployment, to trigger a small income tax cut.
As a result, the levy will remain at 5.1 percent
in 2017.
The stagnant tax rate has rekindled debate on
Beacon Hill over a voter referendum, passed
nearly a decade ago [sic-nearly two decades
ago], that called on the state to lower the
personal income tax.
In 2000, voters overwhelmingly approved a ballot
question to cut the then-5.95 tax rate to 5
percent. Two years later, legislators froze the
rollback at 5.3 percent to plug budget gaps and
added a mechanism allowing the rate to fall only
if growth in annual revenues met certain
benchmarks.
A tax cut has been triggered four times in the
past decade, most recently in 2016 when it fell
.05 percent to the current level.
Taxpayer advocates have blasted lawmakers for
defying voters, and say the rate should have
dropped to 5 percent years ago.
"The fact that almost two decades later we're
still not down to 5 percent is appalling," said
Chip Faulkner, a spokesman for the group
Citizens for Limited Taxation. "The
Legislature should be totally ashamed of itself
for refusing to lower the rate to the level
mandated by voters."
He said Democrats have repeatedly failed to
honor the will of voters. Republican lawmakers
have sought for several years to lower the rate
by legislation, but their proposals are stymied
in the Democratic-controlled Legislature.
Senate Minority Leader Bruce Tarr, a Gloucester
Republican, has filed a tax rate rollback bill
for the past several legislative sessions.
Lawmakers who oppose dropping the rate argue
that the state would take a major hit that would
mean less money for public schools,
transportation and other needs.
Fixing it at 5 percent would mean a roughly $500
million loss to the state, according to the
Department of Revenue.
"We have this debate year after year, when tax
bills and the budget comes up, but most members
vote largely against reducing it to 5 percent,
as the voters asked for," said House Minority
leader Brad Jones, R-North Reading, the main
sponsor of a tax rollback bill in the House.
"It's unfortunate."
Rep. Jim Lyons, R-Andover, said voters should be
outraged that the state hasn't yet lowered the
rate to 5 percent.
"The hardworking people of Massachusetts live
under constant fear of the Democrats wanting to
raise taxes and take more money from them," he
said.
Meanwhile, House Speaker Robert DeLeo has
refused to rule out tax increases as the
Legislature gets to work on next fiscal year's
budget.
Tax collections midway through fiscal 2018 are
exceeding the state's benchmarks by more than
$728 million, but legislative leaders are
concerned about cuts in federal funding and a
referendum inching toward the November ballot
that seeks to cut the state's 6.25 percent sales
tax to 5 percent.
Gov. Charlie Baker, a Swampscott Republican who
opposes tax hikes, is set to file his
preliminary budget by the end of the month.
Faulkner said Democratic leaders would be
ill-advised to consider raising taxes,
especially after "voting themselves an $18
million pay raise last year."
"They just can't seem to control their appetite
for more spending and higher taxes," he said.
"The taxpayers are an afterthought."
The Boston Herald
Thursday, September 11, 2018
DeLeo signals no major tax hikes on the horizon
By Matt Stout
House Speaker Robert A, DeLeo is vowing there
will be no new "broad-based" taxes in the House
budget in the coming fiscal year, suggesting
taxpayers won't face any added costs in the next
round of state budget negotiations.
DeLeo also suggested that House lawmakers could
pursue changes to the state's tax code in wake
of the federal tax reform law passed by
Congress.
The Winthrop Democrat's comments have often been
a key indicator of how taxation will be
approached each budget cycle on Beacon Hill,
where a fiscally conservative Republican is
governor while the more liberal Senate has shown
a bigger appetite for more revenue.
"The House will not be proposing any new
broad-based taxes in its budget," DeLeo said in
a statement released by his office. He also
noted a Jan. 23 hearing the Committee on Revenue
is hosting to discuss possible changes to the
state's own tax code in wake of the federal
changes, which, among a range of other things,
now cap state and local tax deductions at
$10,000.
DeLeo said the House is "exploring options to
mitigate negative repercussions" for
Massachusetts taxpayers, with a focus on the
so-called "SALT cap."
"As we go through the budget process, we are
mindful of how changes to the federal tax code
will impact both Massachusetts residents and the
local economy," DeLeo said.
Other tax changes could await the state as well.
The House last year opposed tacking any new
taxes onto the short-term rental market, saying
it preferred to address levies on rentals
through Airbnb and other sites in an omnibus
bill some time this year.
Voters could also weigh in on two major changes
at the ballot this November: One proposed ballot
question would reduce the state sales tax, while
another measure seeks to impose an additional 4
percent tax on the income of those making more
than $1 million.
Politico
Tuesday, April 9, 2018
Blue states eye 'political gift' in tax
workaround fight with Trump
Democratic leaders in New York, California and
New Jersey aim to protect voters from changes
related to state and local taxes
By Jimmy Vielkind, Ryan Hutchins, and David
Siders
ALBANY, N.Y. — The new tax law’s limit on the
state and local tax deduction may pose a fiscal
threat to high-tax states and their affluent
taxpayers. But it’s also a political gift to
Democratic officials in those states seeking to
raise their national profiles by challenging
President Donald Trump and circumventing the
law.
For Democratic leaders in New York, California
and New Jersey, finding state-level workarounds
to the new tax code could deliver on a
pocketbook issue for a key constituency: voters
in high-cost suburbs from Orange County,
California, to Westchester, New York, who are
set to lose the most from the SALT cap.
Take New York Gov. Andrew Cuomo: He’s called the
SALT cap tantamount to “economic civil war” as
he lays the groundwork for a potential
Democratic primary bid in 2020. Like his
counterparts in California and New Jersey, he’s
considering mechanisms for taxpayers to fund
state and local government with charitable
contributions that are then credited against
their tax liability; he’s also looking at a
proposal to shift the tax burden from income
taxes to payroll taxes.
“In a funny way, Cuomo’s been handed a political
gift here,” argues Larry Levy, executive dean of
the National Center for Suburban Studies at
Hofstra University on Long Island, adding that
“putting the state on war footing, invoking the
language of conflict, is a brilliant political
strategy.”
If Cuomo changes state law “on behalf of
suburban swing voters who have been hurt hardest
by federal tax reform, then he is in a position
to strengthen his appeal in any run for higher
office,” Levy says.
The potential workarounds in each state could
face challenges from the IRS or congressional
Republicans banking on the revenue the SALT cap
was designed to raise.
But in New York, the fight looks worth it to
Democrats. Geoff Berman, executive director of
the New York Democratic State Committee, issued
a statement saying Republicans who tried to stop
the workarounds would “defend the indefensible.”
Of the workaround ideas under consideration
across the nation, the donation-and-credit
approach has the most traction, with proposals
already on the table in New Jersey and
California. There, Senate President Kevin de
León wants to create a “California Excellence
Fund,” available for state programs, for which
donations are offset by a dollar-for-dollar
state tax credit.
“California is already a huge donor state,
meaning we send far more money to Washington
than we get in return. So we don’t plan on
bankrolling this trillion-dollar tax giveaway as
well,” de León told POLITICO.
His measure is sure to attract attention as he
moves forward with a primary challenge to U.S.
Sen. Dianne Feinstein. It would require only a
majority vote in each chamber of the California
legislature, attainable without Republican
support in the heavily Democratic state, but
could jam state lawmakers as well as members of
Congress.
Just two of California’s 14 House Republicans
voted against the tax bill: Reps. Darrell Issa
and Dana Rohrabacher. The remaining dozen have
come under attack from Democrats in a state
where the tax overhaul polled abysmally — and
where several vulnerable Republicans face
competitive reelection contests this year.
Democrats are focusing their efforts in
California on seven Republican-held districts
that Hillary Clinton carried in 2016, including
in suburbs in Orange County and the Los Angeles
area that Levy was talking about.
One of California’s embattled Republicans, Rep.
Ed Royce, announced Monday that he will not seek
reelection. Royce, chairman of the House Foreign
Affairs Committee, had come under intense
criticism for his tax vote, among other issues.
In New York, five of the nine Republicans in the
House delegation voted against the bill, and in
New Jersey, it was four out of five. Democratic
Rep. Josh Gottheimer outlined a plan Jan. 5 to
give municipalities the ability to create new
funds that would permit homeowners to pay their
property taxes by making a charitable
contribution.
Residents would receive a credit for the amount
paid to offset their bill, and then would be
able to take a charitable deduction when they
file their federal tax return.
New Jersey Gov.-elect Phil Murphy, who is set to
take office next week, offered his support; it
could be used to salvage one of the Democrat's
biggest campaign proposals — a millionaires tax
worth some $600 million a year.
National Republicans are pushing back. Gary
Cohn, chair of the National Economic Council,
told Bloomberg that he understands the
workaround measures, but “we at the federal
government still have to collect revenue.”
Rep. John Faso (R-N.Y.) said Cuomo’s energy was
misdirected. “The solution is to lower the cost
of government in New York and make our state a
place where businesses can create jobs so our
people don’t have to flee,” he said.
And the legality of the proposals, despite what
advocates say, remains untested. A group of a
dozen tax law professors and other experts
included both principles in a paper of
workaround options circulated last month —
titled “The games they will play” — but
The Tax Foundation argued last week that
because a taxpayer is getting a one-for-one
benefit for their donation, it can’t be
considered deductible.
Shifting to payroll taxes would be more
complicated than the donation idea, business
leaders say. Critics note that it would involve
reducing wages for some workers and that its
benefits would vary by region. It would be a
huge hassle with little benefit for a
manufacturing firm in Utica, say, but a boon to
a white-shoe law firm in Manhattan — and is
tripped up by union contracts and the state’s
large nonprofit sector.
But Cuomo is looking at it anyway, a Cuomo
administration official told POLITICO, with the
hope of unveiling a legislative proposal next
week when the governor proposes his budget for
the coming fiscal year. It might also include
new funds for taxpayers to directly donate to
nonprofit entities — like hospitals or
universities — that are supported by state
funding. There could be authorization for local
governments, as New Jersey is doing, or perhaps
a fund similar to the one being considered in
California, the official said.
The administration official said it would look
bad for the IRS to “tie themselves into knots”
by cracking down.
Some in the business community are supportive.
Kathy Wylde, head of the Partnership for New
York City, a business group, said she was happy
that the governor’s team is “brainstorming” ways
to soften the loss of deductibility, which is
exactly what her members are doing. “It’s a
competitiveness factor that the governor is
right to be worried about,” she said, saying
there are national implications. “The erosion of
those urban centers hurts the entire country."
Plus, state Democratic leaders see little
political alternative.
“You can’t do nothing,” the administration
official said, “because if you do nothing,
you’re really not standing up for the people
that you represent when Washington basically
attacked New York.” |
| |
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
|
