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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 — |
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CLT UPDATE
Monday, June 18, 2018
SJC kills Grad Tax
― for the sixth time!
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The
state's high court on Monday struck a proposed $2 billion
income surtax from November's ballot, ruling the question
improperly mixes two different spending priorities and a
major change in tax policy. The decision means voters will
not decide one of the biggest state tax policy questions in
decades - whether to stray from the uniform income tax rate
and begin assessing a higher tax rate on people with the
largest annual incomes....
The Supreme Judicial Court's ruling remands the case to
county court, where a judgment will be entered declaring
Attorney General Maura Healey's certification of the
petition "not in compliance" with the Constitution and the
petition "not suitable to be placed on the ballot in the
2018 Statewide election."
The court found that voters who favored a graduated
income tax but not earmarking funds for a specific purpose
and voters who wanted to designate funds for transportation
and education but not to adopt a graduate tax structure
would be in an "untenable position."
State House News Service
Monday, June 18, 2018
SJC derails income surtax, cites multiple subjects
The Supreme Judicial Court struck down the
so-called millionaire tax in a long-awaited ruling that
finds the proposal ran afoul of the state constitution by
combining unrelated subjects of the tax increase and
spending on education and transportation.
“We conclude that the initiative petition
should not have been certified by the Attorney General as
‘in proper form for submission to the people,’ because,
contrary to the certification, the petition does not contain
only subjects ’which are related or which are mutually
dependent’,” Justice Frank M. Gaziano wrote in the
decision....
“The two subjects of the earmarked funding
themselves are not related beyond the broadest conceptual
level of public good,” Gaziano wrote. “In addition, they are
entirely separate from the subject of a stepped rather than
a flat-rate income tax, which, by itself, has been the
subject of five prior initiative petitions. Because a
reasonable voter could not fairly accept or reject the
petition as a unified statement of public policy, Initiative
Petition 15-17 does not meet the relatedness requirement.”
The Boston Herald
Monday, June 18, 2018
SJC rejects putting 'millionaire tax' on ballot
The Democrat-controlled Legislature's plans
to use an income surtax to boost education and
transportation spending went up in smoke Monday morning, and
will force Beacon Hill leaders and candidates to go back to
the drawing board.
The Supreme Judicial Court's ruling, which
derailed a constitutional amendment imposing a 4 percent
surtax on household incomes above $1 million, also was a
loss for Attorney General Maura Healey, whose decision to
certify the petition as ballot eligible was overturned.
The ruling was a win for business groups -
the Mass. High Tech Council, Mass. Taxpayers Foundation and
Associated Industries of Massachusetts - that challenged
Healey's decision and argued the proposal improperly
conflated subjects....
"This historic decision will prevent special
interests from circumventing the Constitution's separation
of powers, under which the Legislature must determine
specific public expenditures and specific tax rates on
specific groups of taxpayers," the plaintiffs said. "This
case was not about whether a graduated income tax is good
public policy or bad public policy, it was about how the
proponents tried to achieve it – a method in direct
violation of the Constitution under which the Legislature’s
deliberative taxing and spending authority would have been
severely limited."
State House News Service
Monday, June 18, 2018
Winners and losers in SJC's historic tax ruling
“By rejecting the notion that a small
special interest group can usurp legislative power by
including unrelated tax and spending provisions in the same
ballot initiative, the court has preserved the state’s
ability to make deliberative and fiscally sound choices,”
said Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation.
But the unions and activists behind the tax
increase were stricken....
The state Department of Revenue had
estimated that the millionaires tax would have generated
between $1.6 billion and $2.2 billion in additional state
tax revenues in 2019.
Now, without the potential of that
additional money, “we will need to be creative and take a
hard look at potential revenues from new sources to address
the very real challenges we face as a Commonwealth,” said
outgoing Senate President Harriette L. Chandler.
The Boston Globe
Monday, June 18, 2018
SJC rejects ‘millionaires tax’ ballot question
Chip Ford, Executive Director of Citizens
for Limited Taxation, plans
to send out one more fundraising appeal to raise enough
money to continue the group’s operation when he returns from
his trip to scout and choose from one of many less abusive
and oppressive, more affordable places to relocate.
“The response to the mailing will determine whether CLT will
be able to continue through the November election, or
instead will just fade away as operating funds run out,”
said Ford in CLT’s current newsletter. “I’d like to see CLT
fight on through the coming election ―
a final crusade on behalf of taxpayers
― but even if we somehow manage to stretch CLT’s
life-support through then, it’ll be game-over, the end of an
era. 'Forty-Four Years as The Voice of Massachusetts
Taxpayers’ will end at 44.” Ford said there
is simply not enough support any more for the sustained
effort required to defend Massachusetts taxpayers. He notes
that too few and getting fewer are carrying the burden for
far too many who have taken a free ride for all these
decades. “Soon all will need to individually fend for
themselves, without CLT, said Ford. I don’t want to be here
when that happens.” Ford concluded, “I
thought you [the taxpayers] should know what’s ahead so
that, like me, you too can begin making your own
self-defense preparations.” CLT’s founder,
the late Barbara Anderson, passed away in April of 2016.
Beacon Hill Roll Call
Week of June 11-15, 2018
Citizens for Limited Taxation (CLT) in danger of shutting
down
By Bob Katzen
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Chip Ford's CLT
Commentary
Well that was sure good timing on the
highest court's part ―
announcing its decision before I board my flight tomorrow
and undertake my mission to seek greener pastures! It
would have killed me to miss this huge victory for taxpayers
― the sixth defeat of a
graduated income tax in Massachusetts ― to not be here to
share in the celebration with you.
I've got to admit to
being pleasantly surprised that the state Supreme Judicial
Court agreed with us, made a decision that was patently
obvious. It's sure been a long time since that
happened, if ever.
But this setback won't
slow down The Takers. Already outgoing Senate
President Harriette Chandler has vowed "We will need
to be creative and take a hard look at potential revenues
from new sources to address the very real challenges we face
as a Commonwealth.”
It's the same old question we ask over and
over: "What part of 'NO' don't you understand?!?
Everyone, hold down the fort while I'm away.
More when I return next week.
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Chip Ford
Executive Director |
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State House News Service
Monday, June 18, 2018
SJC derails income surtax, cites multiple
subjects
By Katie Lannan
The state's high court on Monday struck a
proposed $2 billion income surtax from
November's ballot, ruling the question
improperly mixes two different spending
priorities and a major change in tax policy.
The decision means voters will not decide one of
the biggest state tax policy questions in
decades - whether to stray from the uniform
income tax rate and begin assessing a higher tax
rate on people with the largest annual incomes.
Dubbed the millionaire's tax or Fair Share
Amendment by its supporters, the question sought
to amend the state Constitution to impose a 4
percent surtax on annual household incomes over
$1 million, with the associated revenue
dedicated to education and transportation.
The Supreme Judicial Court's ruling remands the
case to county court, where a judgment will be
entered declaring Attorney General Maura
Healey's certification of the petition "not in
compliance" with the Constitution and the
petition "not suitable to be placed on the
ballot in the 2018 Statewide election."
The court found that voters who favored a
graduated income tax but not earmarking funds
for a specific purpose and voters who wanted to
designate funds for transportation and education
but not to adopt a graduate tax structure would
be in an "untenable position."
"A voter who commuted to work on an unreliable
subway line, but who did not have school-aged
children and was unconcerned about public
education, might want to prioritize spending for
public transportation, without devoting
additional resources to public education, but
would be unable to vote for that single
purpose," the decision said. "A parent of young
children, who lived in a rural part of the
Commonwealth and did not own a motor vehicle,
would be unable to vote in favor of prioritizing
funding for early childhood education without
supporting spending for transportation."
The suit was filed by officials from three major
business groups - the Massachusetts High
Technology Council, Mass. Taxpayers Foundation
and Associated Industries of Massachusetts.
The state Constitution allows initiative
petitions to contain only subjects that are
"related" or "mutually dependent," and the
lawsuit argued that the proposed surtax
improperly bundled unrelated subjects of a
graduated income tax and spending on education
and transportation.
The proposed constitutional amendment specified
that revenues collected from the surtax could
only be spent to provide "quality public
education and affordable public colleges and
universities, and for the repair and maintenance
of roads, bridges and public transportation."
A dissenting opinion written by Justice Kimberly
Budd and joined by Chief Justice Ralph Gants
said there was "no way to separate the question
into subjects and still have the same question
-- the petition does not have the same meaning
if its subjects are separated."
Supporters of the tax, proposed by the Raise Up
Massachusetts Coalition that is also behind
ballot questions to raise the minimum wage and
establish a paid leave insurance program, have
said it would support critical investments in
public education and transportation, without
most taxpayers bearing the burden.
Opponents warned it could lead to an exodus of
wealth from the state, along with tax revenues
associated with higher income households.
A Suffolk University poll of 500 likely voters,
conducted earlier this month, found more than 66
percent in favor of the surtax.
Gov. Charlie Baker, who appointed five of the
high court's seven judges, has consistently
declined to stake out a position on the surtax,
saying it was not guaranteed a spot on the
ballot.
Healey certified the constitutional amendment as
ballot-eligible in September 2015, and the
Department of Revenue in 2015 concluded it would
generate $1.9 billion a year.
The Democrat-controlled Legislature twice
endorsed the question for the ballot despite
Republican opposition, voting 134-55 to advance
it in June 2017 and 135-57 in 2016.
The decision could have ramifications on other
potential ballot questions.
The Retailers Association of Massachusetts,
which is pursuing a question to lower the 6.25
percent sales tax to 5 percent and opposes two
other initiatives that would institute a paid
family and medical leave program and gradually
raise the minimum wage to $15, has said any
legislative deal to keep some combination of
those three proposals off the ballot "is
inextricably tied" to the court's decision.
Ballot campaigns face a July 3 deadline to
submit their final round of signatures.
The Boston Herald
Monday, June 18, 2018
SJC rejects putting 'millionaire tax' on ballot
By Brian Dowling
The Supreme Judicial Court struck down the
so-called millionaire tax in a long-awaited
ruling that finds the proposal ran afoul of the
state constitution by combining unrelated
subjects of the tax increase and spending on
education and transportation.
“We conclude that the initiative petition should
not have been certified by the Attorney General
as ‘in proper form for submission to the
people,’ because, contrary to the certification,
the petition does not contain only subjects
’which are related or which are mutually
dependent’,” Justice Frank M. Gaziano wrote in
the decision.
The controversial ballot question, approved by
the legislature and Attorney General Maura
Healey, who defended it to the SJC, would have
asked voters to approve a 4 percent surtax on
personal income over $1 million. The estimated
$2 billion in revenue would then be earmarked
for education and transportation.
Massachusetts High Technology Council president
Christopher Anderson filed suit in October 2017
to block the question from appearing on the
ballot, claiming the question earmarked funds in
a way that’s prohibited by the state
constitution. The SJC heard arguments in the
case Feb. 6.
Lawyers opposing the ballot measure also say it
improperly combines unrelated subjects in a
single initiative so as to have the popular
increase in spending on education and
transportation carry the less popular increase
in taxes.
The SJC agreed with this point.
“The two subjects of the earmarked funding
themselves are not related beyond the broadest
conceptual level of public good,” Gaziano wrote.
“In addition, they are entirely separate from
the subject of a stepped rather than a flat-rate
income tax, which, by itself, has been the
subject of five prior initiative petitions.
Because a reasonable voter could not fairly
accept or reject the petition as a unified
statement of public policy, Initiative Petition
15-17 does not meet the relatedness
requirement.”
Healey, whose office defended the certification
of the ballot question, argued the stipulation
that the funds raised be spent on education and
transportation is constitutional because the
legislature can still decide how to specifically
spend the money on education or transportation.
Gov. Charlie Baker, who hasn't taken a stance on
the measure, said last week the tax proposal is
just one of many moving pieces of the state's
economic picture, including other ballot
questions on a $15 minimum wage, family and
medical leave and a cut in the sales tax.
State House News Service
Monday, June 18, 2018
Winners and losers in SJC's historic tax ruling
By Michael P. Norton
The Democrat-controlled Legislature's plans to
use an income surtax to boost education and
transportation spending went up in smoke Monday
morning, and will force Beacon Hill leaders and
candidates to go back to the drawing board.
The Supreme Judicial Court's ruling, which
derailed a constitutional amendment imposing a 4
percent surtax on household incomes above $1
million, also was a loss for Attorney General
Maura Healey, whose decision to certify the
petition as ballot eligible was overturned.
The ruling was a win for business groups - the
Mass. High Tech Council, Mass. Taxpayers
Foundation and Associated Industries of
Massachusetts - that challenged Healey's
decision and argued the proposal improperly
conflated subjects.
Massachusetts High Technology Council President
Chris Anderson, one of five named plaintiffs in
the case, said the council's board and a "team
of partners" worked together for nearly three
years to challenge "this attempt to severely
limit the Legislature’s deliberative taxing and
spending authority."
"This historic decision will prevent special
interests from circumventing the Constitution's
separation of powers, under which the
Legislature must determine specific public
expenditures and specific tax rates on specific
groups of taxpayers," the plaintiffs said. "This
case was not about whether a graduated income
tax is good public policy or bad public policy,
it was about how the proponents tried to achieve
it – a method in direct violation of the
Constitution under which the Legislature’s
deliberative taxing and spending authority would
have been severely limited."
Candidate for governor Jay Gonzalez, endorsed
this month by Democrats at their convention in
Worcester, said the court decision "doesn't
change the fact that we desperately need
additional state revenue to invest in our broken
transportation system and in our education
system that is leaving too many of our young
people behind."
If elected, Gonzalez said, he would "propose
another progressive way to generate meaningful
revenue to help fund the critical investments
needed to address the big challenges holding
regular people back."
The Boston Globe
Monday, June 18, 2018
SJC rejects ‘millionaires tax’ ballot question
By Jon Chesto and Joshua Miller
The Supreme Judicial Court has rejected a ballot
question that would raise the state income tax
on Massachusetts’ highest earners and put that
money into transportation and education,
delivering a crushing defeat for progressive
activists and organized labor and removing a
volatile issue from this fall’s election.
In a split decision, the court sided with
business groups that argued the proposal — which
would have directed an estimated $2 billion a
year in additional revenue into transportation
and education — was unconstitutional. The
measure would have imposed a higher income tax
rate for personal earnings above $1 million.
In a separate decision, the court let stand a
ballot question from the Massachusetts Nurses
Association that seeks to limit the number of
patients assigned to nurses working in
hospitals. Opponents had sought to toss the
question, which still needs another round of
signatures before it appears on the ballot.
On the income tax question, the majority of
judges agreed with the business groups that
challenged the initiative. The court said
Attorney General Maura Healey was wrong to
certify the initiative because it had multiple
subjects that were not related. The state
constitution requires such ballot measures to
have subjects that are related or “mutually
dependent.”
In the majority opinion authored by Associate
Justice Frank Gaziano, the court said voters who
favored the tax increase but not earmarking
funds for specific purposes would be in “the
untenable position of choosing which issue to
support,” and which to disregard.
Gaziano also wrote the initiative did not give
voters the ability to choose between
transportation or education, if they didn’t want
to spend the additional funds on both.
“A voter who commuted to work on an unreliable
subway line, but who did not have school-aged
children and was unconcerned about public
education, might want to prioritize spending for
public transportation, without devoting
additional resources to public education, but
would be unable to vote for that single
purpose,” Gaziano wrote. “A parent of young
children, who lived in a rural part of the
Commonwealth and did not own a motor vehicle,
would be unable to vote in favor of prioritizing
funding for early childhood education without
supporting spending for transportation.”
The business groups that opposed the question
hailed the court’s decision.
“By rejecting the notion that a small special
interest group can usurp legislative power by
including unrelated tax and spending provisions
in the same ballot initiative, the court has
preserved the state’s ability to make
deliberative and fiscally sound choices,” said
Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation.
But the unions and activists behind the tax
increase were stricken.
“We are incredibly disappointed that a few
wealthy corporate executives and their lobbyists
brought this lawsuit that blocked the right of
Massachusetts voters to amend our state’s
constitution,” the Raise Up Massachusetts
coalition said in a statement. “It is stunning
that these business groups would overturn the
will of the more than 157,000 voters who signed
petitions to qualify the Fair Share Amendment
for the ballot.”
Two judges, Associate Justice Kimberly Budd and
Chief Justice Ralph Gants, dissented, saying
that by rejecting the initiative, “the court
fundamentally interferes with the ability of the
people to exercise the constitutionally granted
legislative power.”
The court decision will have significant ripple
effects.
It will remove an issue Democrats had been using
against Governor Charlie Baker, who has been
careful not to take a formal stance on the
question. Both Democratic gubernatorial
hopefuls, Bob Massie and Jay Gonzalez, strongly
supported the “millionaires tax,” as it’s widely
known, and party officials had hoped the
question would have boosted turnout among
left-leaning voters in November.
The uncertainty about the tax question was
influencing negotiations over several other
voter initiatives. Raise Up Massachusetts — a
coalition of labor, religious and community
groups largely financed by union funds —is also
pushing a ballot question to raise the minimum
wage to $15 an hour and another to mandate paid
family and medical leave. Meanwhile, the
Retailers Association of Massachusetts is behind
one to reduce the sales tax to 5 percent. State
lawmakers have been negotiating legislative
compromises on all three, a so-called “grand
bargain” that would have kept the questions from
going on the ballot.
House Speaker Robert A. DeLeo expressed
dissatisfaction with the high court’s opinion.
“I understand the decision and remain committed
to working towards a compromise solution on the
remaining ballot proposals and continuing the
House’s efforts on a policy agenda that will
keep our Commonwealth moving in the right
direction,” DeLeo said in a statement.
There isn’t much time: The last day to file the
final round of signatures for ballot questions
with the state elections office is July 3.
The state Department of Revenue had estimated
that the millionaires tax would have generated
between $1.6 billion and $2.2 billion in
additional state tax revenues in 2019.
Now, without the potential of that additional
money, “we will need to be creative and take a
hard look at potential revenues from new sources
to address the very real challenges we face as a
Commonwealth,” said outgoing Senate President
Harriette L. Chandler.
The business groups opposing the tax question,
led by the Massachusetts High Technology
Council, said it would have hurt the state’s
economic climate and scare away entrepreneurs.
In court, the groups argued that the wording of
the tax effort was unconstitutional, in part
because it combined disparate items—education
and transportation—into one question, a practice
called “logrolling” used to appeal to voters
But the question’s advocates argued that
transportation and education are related because
they are “the keys to social mobility,” and
moreover, are “chronically underfunded
government services.”
Here’s how the surcharge would have worked:
added 4 percent to the tax rate on personal
income above $1 million. For example, the tax on
the first $1 million in earnings would be at the
current 5.1 percent, and 9.1 percent on all
income above that threshold.
Priyanka Dayal McCluskey of the Globe staff
contributed to this report. |
| |
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:
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