Post Office Box 1147    Marblehead, Massachusetts 01945    (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”

47 years as “The Voice of Massachusetts Taxpayers”
and their Institutional Memory

CLT News Release
Tuesday, June 8, 2021

Memo to Members of the Constitutional Convention
Please Reject This Sixth Grad Tax Attempt

For just over a century since Massachusetts imposed an income tax in 1916 the rate has been flat, meaning all taxpayers pay the same tax rate on their earned income.

What can be more fair than every taxpayer paying a tax on their taxable income at the same rate?  That used to celebrated as equality.

A graduated income tax constitutional amendment in one guise or another has been proposed and put on the ballot five times in the past (in 1962, 1968, 1972, 1976, and 1994) and soundly defeated by a large majority of voters every time.

But here we find ourselves once again confronting a sixth bid to amend the state constitution, another attempt to crack the flat tax which will provide the first step toward creating a graduated income tax for all.  This time around it's deceptively dubbed "The Fair Share Amendment," but again we ask, what can be more fair than every taxpayer paying a tax on their taxable income at the same rate?

Pioneer Institute has produced numerous studies and reports on many potential negative effects of this proposed "surtax" on "millionaires," whether those consequences are unintentional or otherwise.  Perhaps the most concerning is that constitutional amendments are extremely difficult and time-consuming to change, requiring many years to reverse once adopted.  Dubious tax policies do not belong in the constitution — period — especially one such as this which will possibly if not likely produce results that need to be quickly reversed or amended.

When the "tech tax," adopted in July of 2013, was found to be bad legislation with significant unintended consequences it was quickly repealed that September retroactively.  As a statute, that quick turnaround was possible to accomplish before more damage was done.  As a constitutional amendment it would not have been; it would have taken many years by which time the damage would have been compounded and irreversible.

Ironically it's not as if the Commonwealth needs an additional (projected) $2 Billion a year at this time, or frankly any time in the near future if at all.

State spending has ballooned over the years.  The FY2017 budget adopted just four years ago was $38.9 billion; the FY2011 budget passed just ten years ago was $27.6 billion; a decade before that the FY2001 budget was $21.4 billion.  When adjusted for inflation that $21.4 billion FY2001 state budget in today’s dollars is equivalent to $32.6 billion.  The proposed $47.6 Billion FY2022 budget now under consideration will increase the coming fiscal year’s state spending by some $15 billion in real dollars over the past twenty-one years — a spending increase of 146%.

Then there is the Commonwealth's unexpected revenue bonanza.  The Department of Revenue announced last week "FY2021 year-to-date collections totaled approximately $30.451 billion, which is $5.689 billion or 23.0% more than collections in the same period of FY2020."  And now the pandemic lockdowns are easing, businesses are reopening, and employment is on the rise.

Lest it be overlooked, the federal government is providing Massachusetts with $5.3 Billion in "free money" relief on top of the record state revenue collection.

Other states finding themselves in this sudden embarrassment of riches predicament are taking a humble and rational approach, for example look what Ohio is doing with its unexpected pandemic revenue windfall:  Income tax cuts, with each branch of its state government vying to outdo the other.  The Washington D.C.- based Tax Foundation reported last Thursday ("Ohio Lawmakers Ponder Tax Relief after Rosy Revenue Outlook"):

"Ohio is one of a growing number of states which experienced revenue increases despite the economic slowdown from the coronavirus pandemic and is now looking to return some of that through tax relief.  The question for Ohio legislators is, how best to do that?

"This week, the Ohio Senate released its budget proposal for the upcoming fiscal biennium (2022-2023) and it includes a 5 percent tax cut to personal income taxes. That differs from earlier versions offered by Gov. Mike DeWine (R), which offers no cuts to the income tax, and the Ohio House of Representatives, which includes a 2 percent cut. The Senate proposal also offers a solution to the issue of cities taxing nonresident workers who haven’t been coming to their offices in those cities throughout the pandemic.

"The Senate tax reduction plan would be implemented over two years, trimming rates by 3.5 percent the first year and 1.5 percent the second year."

What is the Massachusetts Legislature's response to the Commonwealth’s own embarrassment of riches predicament?

For too many legislators it is to propose imposing even more taxes of course.

We ask you to vote down or put aside this sixth assault on the historic Massachusetts flat tax, reject this poorly considered proposed constitutional amendment.  It is not needed now if ever and will only lead to another divisive ballot campaign and a sixth defeat.

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Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    (781) 639-9709