 |
and the
Citizens Economic Research Foundation
Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(781) 990-1251
“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
Sunday, September 16, 2018
The
past, present, and future
|
Sufficient economic growth in 2018 under the
terms of a 2002 law may result in a tax cut for millions of
Bay State taxpayers in 2019. The cut would come from a
reduction in the income tax rate and long-term capital gains
tax from 5.1 percent to 5.05 percent effective January 1,
2019.
These tax cuts do not need the approval of
the Legislature. They are part of a system devised by the
Legislature when it approved a $1 billion-plus tax hike
package in 2002. The package set the long-term capital gains
tax at 5.3 percent and froze the income tax rate at 5.3
percent instead of allowing it to drop to 5 percent in
January 2003 — a reduction that was approved by voters in
2000. The 2002 law also includes an automatic trigger that
reduces both taxes by one-half of 1 percent each year if
certain goals are met, including if revenue from the prior
fiscal year grew at least 2.5 percent faster than the rate
of inflation.
“Next year will mark 30 years — three
decades — since the state income tax rate was ‘temporarily’
hiked from its historic 5 to 5.75 percent, only ‘for 18
months’ we were promised back then,” said Chip Ford,
Executive Director of Citizens for Limited Taxation (CLT).
“We've been fighting to roll it back ever since. Despite
windfall revenues and profligate spending there was never
‘enough revenue’ to keep the promise."
“CLT pursued two ballot question petition
drives to help the Legislature keep its promise, in 2000
winning the ballot vote with 59 percent,” Ford added. “Two
years later the Legislature arrogantly froze it, ignoring
the voters and replacing their mandate with ‘triggers.’
[Former CLT Executive Director] Barbara Anderson died
before ever seeing the “temporary” income tax hike return to
5 percent. Three decades later, with revenue again pouring
in, it's still not complete. Maybe it’ll finally return to 5
percent before more of us are dead and gone?”
Beacon Hill Roll Call
Friday, September 14, 2018
Automatic Income Tax and Long-Term Capital Gains Cut Likely
on January 1
By Bob Katzen
Here’s Citizens for Limited Taxation
Executive Director Chip Ford on last Tuesday’s
primary results: “The only noticeable change is that
Massachusetts became a bit more liberal” and in November
taxpayers will have a choice between “Democrat Lite”
(Charlie Baker) and “Democrat Left” (Jay Gonzalez). By the
way, Ford, a longtime Marblehead resident, says he’s moving
to Kentucky soon.
The Salem News
Friday, September 14, 2018
Weekly Column
By Nelson Benton, editor emeritus
Jay Gonzalez has been promising $60 billion
in new government spending without giving voters a single
detail on which taxes he would raise to finance his plan for
nearly two years, but yesterday, Gonzalez flipped and
promised specifics on his tax hike plan. This comes after
months of claiming he couldn't possibly know which taxes to
raise until he "takes office." So in an effort to remind
voters just how long Gonzalez has been promising to raise
taxes without saying which ones, the MassGOP today launched
the "Gonzalez
Tax Clock" chronicling just how long Jay has been
deceiving voters....
"First Jay Gonzalez says he can't possibly
know which taxes to raise and that voters will just have to
vote him in and find out," said MassGOP Chairman Kirsten
Hughes. "Now he is claiming he can come up with a plan to
budget his $60 billion in new spending to finance his
promised government takeover of every Massachusetts'
citizens' health coverage. It's clear Gonzalez will say
anything anyone wants to hear to advance his interests."
MassGOP News Release
Thursday, September 13, 2018
MassGOP Launches "Gonzalez Tax Clock"
After Promise That $60 Billion Tax Plan Is Forthcoming
Rick Green had a good week. The internet
entrepreneur and founder of the Massachusetts Fiscal
Alliance walked into the Republican nomination for the
Merrimack Valley’s seat in Congress on Tuesday night, while
a vast field of Democrats spent money and attention sorting
out who would face him. That has set up what’s sure to be an
interesting race this fall between Green and either Lori
Trahan or Dan Koh, pending a recount in the Democratic
primary.
The news, however, wasn’t all good for
Green. On Thursday, the Supreme Judicial Court rejected his
appeal in a case where his lawyers had argued that
businesses should be allowed to donate directly to state
political campaigns, just as labor unions can.
The court’s 36-page majority opinion
rationalized the current system as consistent with state law
and even U.S. Supreme Court’s precedent in Citizens United
and a nearly 20-year-old case, Federal Election Commission
v. Beaumont, that upheld a ban on business donations to
federal campaigns, which still exists.
The Massachusetts system allows unions to
give up to $15,000 to a state candidate per election cycle,
while individuals are limited to contributions of up to
$1,000 per calendar year. Corporations are prohibited from
giving at all.
The court’s ruling was disappointing not
just for Green but for the rest of us affected by a
Statehouse locked up by one-party rule. In holding that
rules can be different for some entities, specifically labor
unions, the state’s high court protected a key constituency
and source of cash for the Democratic majority on Beacon
Hill....
Among the purposes for blocking business
donors, [Chief Justice Ralph Gants] noted, is to guard
against the appearance of corruption that might come with
politicians taking dollars directly from commercial
interests. That’s not to say lawmakers acted unfairly, he
wrote, by allowing unions to give money more freely.
“Without citing any legislative history, the
plaintiffs appear to claim that the true legislative purpose
… was to favor labor unions at the expense of corporations.
But there is no evidence to support this claim,” Gants
wrote.
But if direct donations from businesses come
with the appearance of corruption, so do union
contributions. Labor money has the same kinds of strings
attached, be it an understanding that calls get returned, or
that votes on certain bills go the right way, or that
lawmakers support pet projects and interests. If those
things don’t happen, the money dries up.
And the Legislature’s bias toward unions, in
a state with far more Democratic officials than Republican
ones, goes without saying. There are just 34 Republicans in
the 160-member state House of Representatives, compared to
117 Democrats. In the state Senate, there aren’t enough
Republicans (only seven) to field a baseball team. To
suggest that the Legislature doesn’t favor labor is to
discount entirely the way politics work in the state.
Why in the world would the Legislature want
to reform that? ...
And, unfortunately the chances of this
inequity being fixed are dim if you’re waiting on Beacon
Hill to do anything about it.
The Goldwater Institute, which brought the
lawsuit and has pursued it on behalf of the two businesses,
including Green’s, is said to be weighing an appeal to the
U.S. Supreme Court. At this point, that appears to be the
only way the field will be leveled.
A Salem News editorial
Monday, September 10, 2018
High court protects unfair campaign finance law
|
|
Chip Ford's CLT
Commentary
It appears that the income tax rate will
be reduced by 0.05 percent next year
– if the Beacon Hill pols
don't find another way to stall or prevent it
when the newly re-elected Legislature returns from its
long vacation in January. Remember, the first
thing treacherous legislators did when they returned
from their last extended re-election campaign season vacation in
January 2017 was to steamroll through an obscene $18
million pay grab for themselves in stunningly
record-breaking speed.
Of the miniscule income tax rollback, House Revenue Committee chairman Jay
Kaufman (D-Lexington) lamented:
“Massachusetts stands to lose over $80 million
in this fiscal year alone, and over $160 million
in the next fiscal year from this impending .05%
rate reduction. These losses will compound, year
after year, just as the previous rate reductions
have. This reduction in the income tax rate is
required by a 16-year-old law that did not
anticipate the economic realities of today."
If Massachusetts "stands to lose over
$80 million" next year from a 0.05% income tax rate
reduction, "$160 million in the next fiscal year," how
many multi-billions of their dollars have taxpayers been fleeced
by the Legislature's broken promise (lie) that the 1989
tax hike would be "temporary," for "only 18-months"?
That is the "economic reality of today," Mister
Chairman!
Remember, in 1989 when the tax was
"temporarily" hiked it was to cover a fiscal year 1990
state budget of $12 billion.
In 2008 – just ten
years ago – Gov. Patrick signed a budget for $28
billion.
This fiscal year's budget approved in
July was for $42 billion. That's a $30
billion increase in spending –
$30 billion more extracted
from us taxpayers this year alone – than when the "fiscal crisis"
of 1989 led to the "temporary, 18-month" tax hike that
still hasn't gone away. That's an average billion
dollars spending increase every year since the
"temporary" income tax hike was imposed!
And last fiscal year left the state with
a surplus of over a billion dollars.
Still, The Takers again
assert the decades-long mantra that "the state cannot
afford" to keep the three-decades old broken promise
– cannot afford even a 0.05
percent reduction, cannot find $80 million in a bloated
$42 billion budget!
On The Future (if any) of CLT
The response to our final mailing,
announcing the shutting down of Citizens for Limited
Taxation, was surprising –
one of the best in a very long time. Thank you to
those who demonstrated your appreciation for all
CLT has done for so many millions of Massachusetts
taxpayers over its 44 years as their advocate.
The return envelopes also contained an
amazing number of personal thank-you notes, comments,
suggestions, and requests. Reading each was heartening, uplifting, and depressing all at the same
time. I feel badly for abandoning so many great
and generous, longstanding and loyal CLT members to the
rapacious, insatiable state government
– especially when I read
comments like those of Rep. Kaufman, above. But
with the number of supporting members in decline, CLT's
options had been steadily diminishing, were dwindling
quickly. I held the organization together until
continuing on like that was just no longer possible.
I continue to hear regularly from
dejected members trying to come up with ideas to
perpetuate CLT. The most prevalent concern is
that, without CLT and these Updates, they're not going
to even know what's being done to them on Beacon Hill
– and can't oppose what
they don't know is happening. Some sought a
recommendation for an alternative organization, but I
know of none that do what CLT does, at least not as
persistently and effectively. It reached a point where, after
serious consideration, I wrote a response that I'm now
using as a sort of response template for what may
be possible for a CLT future:
Many dozens of CLT members and supporters have
responded to the recent “final” mailing
(announcing that CLT is shutting down), pointing
out that what I do for taxpayers from my office
in Marblehead can be done just as effectively
from anywhere I have access to a computer and a
phone.
They insist that we can keep CLT operating from
wherever I’m located. I know this
is true as, in the past I’ve even sent out
statewide news releases on a laptop from my
small sailboat while on vacation off the coast
of Maine, when Barbara
was alive and I used to have the luxury of taking
some time off.
With today’s technology all this is true
–
in fact I discovered, exposed, organized against
and orchestrated the recent successful defeat of
the “neighborhood tax” (Community Benefit
Districts) all while anchored to my office desk
around the clock. CLT isn’t me: CLT is its members
who collectively respond to my alerts and
directions. I am merely the taxpayer
orchestra’s composer and conductor
–
CLT members are the musicians!
In
theory CLT can continue from anywhere, if
that’s what I want to do when I get there, and
if enough members want it to happen.
As
for "merging CLT with another organization," we
have promised our members since the beginning 44
years ago that CLT will NEVER give up or
give out ANY of our member’s information
for ANY REASON
–
so merging with another organization or selling
or passing on CLT's membership information is
and never has been an option and it won’t
happen.
I
still feel badly for abandoning loyal supporters
like you and the others who’ve stood by CLT this
long with their support. If there were
more like you and them I wouldn’t have had to
face shutting down CLT, been forced to look for
options, wouldn’t have considered moving out of
state. The deteriorating situation left no alternative.
When I’m settled into my new Kentucky home and
have my computer and phone systems again up and
running I will consider if keeping CLT going
–
at least for a while longer and even if in a
more limited role
–
is something that could work with the declining
support and resources we’ve experienced.
Having by then significantly reduced my own living
costs, maybe it could be viable
–
if I want to keep doing it. When 2019
arrives, in January I’ll consider mailing out a
poll to all current and recently-lapsed members,
see how many want CLT to continue, or still
don’t care if it doesn’t.
Stay tuned. A future with Citizens
for Limited Taxation might become possible.
If it can happen, as always it'll be up to you and all
our other members, current and lapsed.
I've sold my house, am still in the
process of excavating two-plus decades' worth of CLT
accumulation from
the offices and storage room upstairs in my house into a
dumpster out front – a
Herculean task similar to his cleaning out the Augean
Stables. I do a lot of it every day. Next
will come packing up what's coming with me, and then the
big move right after the election. (Due to the
recent generous farewell contributions it appears that
CLT can continue on to the election on November 6; this
year two days after my birthday, not falling on it as in
so many past years). Thanks to the response, the
CLT website
is paid through the next five years, will remain online
until 2023. At least the taxpayers' online
"institutional memory" will remain available as a
resource.
That's it for now. My brother is
here to help me lug some heavy, large filing cabinets
from the offices upstairs down to the dumpster, gotta
run.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
|
Beacon Hill Roll Call
Friday, September 14, 2018
Automatic Income Tax and Long-Term Capital Gains
Cut Likely on January 1
By Bob Katzen
Sufficient economic growth in 2018 under the
terms of a 2002 law may result in a tax cut for
millions of Bay State taxpayers in 2019. The cut
would come from a reduction in the income tax
rate and long-term capital gains tax from 5.1
percent to 5.05 percent effective January 1,
2019.
These tax cuts do not need the approval of the
Legislature. They are part of a system devised
by the Legislature when it approved a $1
billion-plus tax hike package in 2002. The
package set the long-term capital gains tax at
5.3 percent and froze the income tax rate at 5.3
percent instead of allowing it to drop to 5
percent in January 2003 — a reduction that was
approved by voters in 2000. The 2002 law also
includes an automatic trigger that reduces both
taxes by one-half of 1 percent each year if
certain goals are met, including if revenue from
the prior fiscal year grew at least 2.5 percent
faster than the rate of inflation.
“Next year will mark 30 years — three decades —
since the state income tax rate was
‘temporarily’ hiked from its historic 5 to 5.75
percent, only ‘for 18 months’ we were promised
back then,” said Chip Ford, Executive
Director of Citizens for Limited Taxation
(CLT). “We've been fighting to roll it back ever
since. Despite windfall revenues and profligate
spending there was never ‘enough revenue’ to
keep the promise."
“CLT pursued two ballot question petition drives
to help the Legislature keep its promise, in
2000 winning the ballot vote with 59 percent,”
Ford added. “Two years later the Legislature
arrogantly froze it, ignoring the voters and
replacing their mandate with ‘triggers.’ [Former
CLT Executive Director] Barbara Anderson
died before ever seeing the “temporary” income
tax hike return to 5 percent. Three decades
later, with revenue again pouring in, it's still
not complete. Maybe it’ll finally return to 5
percent before more of us are dead and gone?”
“Massachusetts stands to lose over $80 million
in this fiscal year alone, and over $160 million
in the next fiscal year from this impending .05%
rate reduction,” said Revenue Committee chair
Jay Kaufman (D-Lexington). “These losses will
compound, year after year, just as the previous
rate reductions have. This reduction in the
income tax rate is required by a 16-year-old law
that did not anticipate the economic realities
of today. The infrastructure needs and demands
of the commonwealth have only increased since
its passage and we have habitually underfunded
critical services—transportation and education
[are] high on the list.”
Kaufman continued, “Reducing the amount of
revenue coming into the state is unwise
particularly at this time as we anticipate
further cuts in federal funding due to the
recent federal tax reform. Reduced state revenue
and federal aid will disproportionately hurt
middle and low-income people while the state and
federal cuts will disproportionately benefit the
wealthy. That’s not good tax policy. I hope my
colleagues take up this fight in earnest in this
coming session.”
MassGOP News Release
Thursday, September 13, 2018
FOR IMMEDIATE RELEASE
MassGOP Launches "Gonzalez Tax Clock"
After Promise That $60 Billion Tax Plan Is
Forthcoming
BOSTON -- Jay Gonzalez has been promising $60
billion in new government spending without
giving voters a single detail on which taxes he
would raise to finance his plan for nearly two
years, but yesterday, Gonzalez flipped and
promised specifics on his tax hike plan. This
comes after months of claiming he couldn't
possibly know which taxes to raise until he
"takes office." So in an effort to remind voters
just how long Gonzalez has been promising to
raise taxes without saying which ones, the
MassGOP today launched the "Gonzalez Tax Clock"
chronicling just how long Jay has been deceiving
voters.
The "Gonzalez Tax Clock," hosted at
HowWillJayPay.com ticks forward from the
moment Gonzalez promised voters he'd reveal his
secret tax plan. The clock also counts forward
from the end of January 2017, when Gonzalez
launched his campaign with the first promises of
his $60 billion agenda.
"First Jay Gonzalez says he can't possibly know
which taxes to raise and that voters will just
have to vote him in and find out," said MassGOP
Chairman Kirsten Hughes. "Now he is claiming he
can come up with a plan to budget his $60
billion in new spending to finance his promised
government takeover of every Massachusetts'
citizens' health coverage. It's clear Gonzalez
will say anything anyone wants to hear to
advance his interests."
CLICK HERE TO SEE THE GONZALEZ TAX CLOCK:
HowWillJayPay.com
Background:
Gonzalez Has Recklessly Proposed As Much As $60
Billion In New Spending
Single Payer Health Care: $35 Billion (Promise |
Cost*)
Universal Pre-K: $1.48 Billion (Promise | Cost)
North-South Rail Link: $12 – 21 Billion (Promise
| Cost)
East-West Rail: $554 – $660 Million (Promise |
Cost)
South Coast Rail (Electrified): $3.4 Billion
(Promise | Cost)
Extended Blue Line: $737 Million – $1 Billion
(Promise | Cost)
Gonzalez Has Repeatedly Refused To Answer
Questions About How He’ll Pay For His Spending
Gonzalez In An Interview With WGBH’s Jim Braude:
BRAUDE: “Assuming you are the candidate, you are
going to say to the voters, ‘I am going to raise
your taxes progressively but I am not going to
tell you how I am going to raise them and how
much until I am elected and I go to the Revenue
Commissioner and he or she will let me know?’
GONZALEZ: “So I am telling voters that I hear
them when they tell me that they are done with
our transportation system that doesn’t work for
them.
BRAUDE: “Yeah but what’s the answer to my
question?
GONZALEZ: “I am going to propose a way, to ask
those who are doing well-
BRAUDE: “But not before election day?
GONZALEZ: “You can't have a detailed proposal
for how to do this where you understand what the
consequences of it are in terms of revenue and
impacts on which people are impacted without the
Department of Revenue doing that. So what I’m
saying that they will know based on my campaign,
I will come up with a proposal to raise
additional revenue from those who are doing well
in the state who by the way, pay the lowest
percent of their income tax here in
Massachusetts.
BRAUDE: “But not the specific plan until you’re
Governor?”
GONZALEZ: “Yep.” (Jay Gonzalez Wants A
Progressive Alternative To Millionaires Tax, But
Can't Specify Details Until He's Elected,” WGBH,
7/11/18)
Gonzalez In An Interview With Herald Radio: "I
don't have a specific detailed proposal at this
point and it's going to take working with the
Department of Revenue as governor very quickly
to come up with a thoughtful proposal." (Source)
Gonzalez At The WGBH Debate: “But asked
specifically how he would do that, Gonzalez said
only that he would ask the Department of Revenue
to give him options, and he would look at
unspecified corporate tax breaks.” (Shira
Schoenberg, “Policy differences emerge between
gubernatorial candidates Bob Massie, Jay
Gonzalez on rent control, congestion pricing,”
Springfield Republican, 8/16/18)
Democrat Bob Massie On Gonzalez’s Lack Of Plans:
“This Is a Huge Cloud Of Vagueness” (Democratic
Gubernatorial Debate, WGBH, 8/16/18)
*Single Payer Healthcare: Based on formula
produced by Beacon Hill Institute (“Proposals
for Universal Health Care in Massachusetts: Do
They Exceed the Recommended Dosage?” Beacon Hill
Institute, 11/2/2000)
Total Health Care Expenditures in Massachusetts
(2014): $71.27B (“Health Care Expenditures by
State of Residence (in millions),” Kaiser Family
Foundation)
Portion Of Total Expenditures From Private
Insurance And Out Of Pocket Costs: $43.263B
(60.7% of $71.27B) (“Total Health Services -
Percent of persons with an expense, mean expense
per person with an expense, and distribution of
expenses, by source of payment, United States,
2010,” Agency for Healthcare Research and
Quality)
LESS: Assumed Cost Savings: $7.275B (adjusting
BHI cost savings for CPI inflation)
Total Single Payer Cost: $35.96B
###
The Salem News
Monday, September 10, 2018
A Salem News editorial
High court protects unfair campaign finance law
Rick Green had a good week. The internet
entrepreneur and founder of the Massachusetts
Fiscal Alliance walked into the Republican
nomination for the Merrimack Valley’s seat in
Congress on Tuesday night, while a vast field of
Democrats spent money and attention sorting out
who would face him. That has set up what’s sure
to be an interesting race this fall between
Green and either Lori Trahan or Dan Koh, pending
a recount in the Democratic primary.
The news, however, wasn’t all good for Green. On
Thursday, the Supreme Judicial Court rejected
his appeal in a case where his lawyers had
argued that businesses should be allowed to
donate directly to state political campaigns,
just as labor unions can.
The court’s 36-page majority opinion
rationalized the current system as consistent
with state law and even U.S. Supreme Court’s
precedent in Citizens United and a nearly
20-year-old case, Federal Election Commission v.
Beaumont, that upheld a ban on business
donations to federal campaigns, which still
exists.
The Massachusetts system allows unions to give
up to $15,000 to a state candidate per election
cycle, while individuals are limited to
contributions of up to $1,000 per calendar year.
Corporations are prohibited from giving at all.
The court’s ruling was disappointing not just
for Green but for the rest of us affected by a
Statehouse locked up by one-party rule. In
holding that rules can be different for some
entities, specifically labor unions, the state’s
high court protected a key constituency and
source of cash for the Democratic majority on
Beacon Hill.
To be sure, Green’s business, 1A Auto Inc., and
his co-plaintiff, 126 Self Storage Inc., weren’t
so much asking for a limit on union
contributions as allowing ones from corporations
too. But the essence of their argument was that
the two-class system is unfair. The court, in
the opinion written by Chief Justice Ralph
Gants, rejected their reasoning.
Among the purposes for blocking business donors,
Gants noted, is to guard against the appearance
of corruption that might come with politicians
taking dollars directly from commercial
interests. That’s not to say lawmakers acted
unfairly, he wrote, by allowing unions to give
money more freely.
“Without citing any legislative history, the
plaintiffs appear to claim that the true
legislative purpose … was to favor labor unions
at the expense of corporations. But there is no
evidence to support this claim,” Gants wrote.
But if direct donations from businesses come
with the appearance of corruption, so do union
contributions. Labor money has the same kinds of
strings attached, be it an understanding that
calls get returned, or that votes on certain
bills go the right way, or that lawmakers
support pet projects and interests. If those
things don’t happen, the money dries up.
And the Legislature’s bias toward unions, in a
state with far more Democratic officials than
Republican ones, goes without saying. There are
just 34 Republicans in the 160-member state
House of Representatives, compared to 117
Democrats. In the state Senate, there aren’t
enough Republicans (only seven) to field a
baseball team. To suggest that the Legislature
doesn’t favor labor is to discount entirely the
way politics work in the state.
Why in the world would the Legislature want to
reform that?
Both unions and businesses certainly have plenty
of chances to dump their money into politics.
They can give to political action committees.
They can lobby. And they can influence elections
with spending that isn’t directly coordinated
with candidates, which was the activity
protected as free speech by the Supreme Court’s
ruling in Citizens United.
All of those are different from direct campaign
contributions, however. In that area, the state
maintains a double standard.
Paul Craney, spokesman for the Mass. Fiscal
Alliance, on Thursday called it the “country’s
most unfair state campaign finance law.” He
described the court’s ruling as a “major defeat
for proponents of campaign finance reform.”
And, unfortunately the chances of this inequity
being fixed are dim if you’re waiting on Beacon
Hill to do anything about it.
The Goldwater Institute, which brought the
lawsuit and has pursued it on behalf of the two
businesses, including Green’s, is said to be
weighing an appeal to the U.S. Supreme Court. At
this point, that appears to be the only way the
field will be leveled. |
| |
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
▪ (781) 990-1251
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