TEAM held it's poorly-attended news conference at the State House yesterday. Elizabeth Beardsley of
the State House News Service and maybe one other reporter attended, according to
CLT's associate director, Chip Faulkner -- who was there to monitor and pass out our
news release. The other 25 or so in attendance were all TEAM cheerleaders. State Rep. Jim Marzilli
(D-Arlington) was in and out a few times, Chip reported, but no other legislator he recognized
attended.
Jimmy used TEAM standard operating procedures: say it fast so it sounds good even if it doesn't add up.
Below, I've addressed a few of his most ridiculous comments, reported in the State House News Service
report that follows:
Former opponents of the voter-approved income tax cut want the state to raise more money ...
Ah geez, Jimmy, you disappointed us. Here was where we expected TEAM would endorse our Voluntary
Tax check-off. Then all you good tax-and-spend liberals could provide your own solution, demonstrate
your commitment and caring, lead by example, personally succor all those "unmet needs."
The Tax Equity Alliance of Massachusetts released new data today showing that the corporate share of
overall state tax collections has declined from 19 percent in 1971 to 10 percent in 2000. During that
same timeframe, the income tax portion of the tax load has grown from 41 percent to 57 percent.
Say it fast and it sounds good, Jimmy, but did you consider that it's been the increased personal income
tax rate that affected that comparison, not just a lowered corporate burden?
"Last year, the public said, we're tired of that and we're not going to take that burden anymore.
Now, the question is -- where do we shift that burden back onto?"
Jimmy, that is exactly what the public said: "We're tired of that and we're not going to take that burden
anymore." We're quite impressed that you've finally gotten the message -- but just how did you manage the
leap to this phantom demand for alleged burden-shifting?
He also said there's no evidence that the tax break has actually encouraged more investment.
Jimmy, there is no evidence that it hasn't, either! So what's your point?
As a less-preferred second alternative to raising revenue, St. George said the state could consider
raising the sales tax. When measuring what percentage of the overall tax-take is made up of sales taxes,
Massachusetts ranks 45th among the states, he said.
"Percentage of the overall tax-take," Jimmy? Your lips are moving fast again, so let's all just slow down
and think: The higher the income tax and other revenue sources, the lower the "percentage of overall
tax-take is made up of sales taxes," plain and simple!
If every state had a 5 percent sales tax, the states with no income tax would have the highest "percentage of
overall tax-take" from their sales tax! If such states had no other revenue source but a sales tax,
their sales tax would be
100 percent of that state's "tax-take."
We've got both and then some; there isn't a tax any other state has imposed that Massachusetts has
missed. I'm surprised that we're not 50th!
I do like the way you put it though, Jimmy: "tax-take." Wish we'd thought of phrasing it that way first.
 |
|
Chip Ford |
State House News Service
Wednesday, March 14, 2001
After losing income tax cut battle,
liberals take aim at
business
By Elisabeth J. Beardsley
STATE HOUSE, BOSTON, MARCH 14, 2001 ... Former opponents of the voter-approved income tax cut want the state to raise more
money by revisiting some of the millions of dollars in corporate tax breaks that were passed during the 1990s.
The Tax Equity Alliance of Massachusetts released new data today showing that the
corporate share of overall state tax collections has declined from 19 percent in 1971 to 10
percent in 2000. During that same timeframe, the income tax portion of the tax load has
grown from 41 percent to 57 percent.
"We're shifting the taxes away from corporations and onto people," said TEAM Executive
Director Jim St. George. "Last year, the public said, we're tired of that and we're not going
to take that burden anymore. Now, the question is -- where do we shift that burden back
onto?"
If corporate taxes were restored to their 1971 levels, they would be $1.4 billion higher than
today, St. George said. "That's Question 4. You've just paid for it," he said.
TEAM wants lawmakers to revisit all so-called "tax expenditures" -- specific tax breaks
carved out to benefit a particular group such as manufacturers, veterans or the
elderly. St. George said he has no problem with most of the tax breaks, but he singled out four that are
aimed at business.
The first is the investment tax credit, which provides a 3 percent tax break on capital
purchases and costs $53 million per year, St. George said. The second is the "single sales
formula" tax break for manufacturers, which was originally aimed at Raytheon. Worth $270
million per year, the tax break allows manufacturers to determine their income subject to
taxes based solely on sales in-state.
The third tax break that TEAM wants to revisit is the "accelerated depreciation" initiative,
which allows companies to deduct the cost of equipment more rapidly than its expected
lifespan, and costs about $160 million per year, St. George said. Finally, TEAM supports
legislative efforts to revisit the capital gains tax break, for which there are no cost estimates,
he said.
"We want the Legislature to pay attention to tax breaks as much as direct expenditures," St.
George said. "It's no different to close a corporate subsidy that takes place through
the tax code than to cut an on-budget spending item."
Business officials are alarmed at the new push. Associated Industries of Massachusetts
Executive Vice President for Public Affairs Brian Gilmore said the corporate community
would "absolutely" fight any such attempts in the Legislature. The pro-business policies of the
last decade have helped pull the state out of the fiscal nightmare of the late 1980s, and have
driven Massachusetts unemployment to the lowest levels nationwide, he said.
The tax breaks help existing Massachusetts businesses stay competitive by allowing them to
buy new technology and expand facilities in-state, Gilmore said. And since "the bottom line"
is very important in decisions about where to locate, most businesses place the tax burden
"right up there" on the list of priority considerations, he said.
"TEAM's proposal to get us back to where we were 10 or 15 years ago is pretty tired,"
Gilmore said. "Especially as we are in a period of economic slowdown, it's not the time at all
to discourage business and industry who want to expand by reneging on some of these
initiatives that were wisely put into place by the Legislature and the administration."
The Massachusetts High Technology Council, which represents 200 companies, cites
protection of the capital gains tax break and research and development grants among its top
three priorities, said Vice President Cort Boulanger. The capital gains tax was the subject of
some dispute last year, with lawmakers voting to freeze its phase-out, but Gov. Paul
Cellucci vetoing the measure.
Boulanger said the capital gains tax break encourages businesses and individuals to make
long-term investments by requiring them to hold onto capital assets for six years before
the tax break can be fully availed.
"It's all under the umbrella of competitiveness," Boulanger said. "They love being in
Massachusetts, but they're not going to do it if it's not in their business interest. The fact they
can invest in their company and not be punished by huge capital gains is certainly a benefit."
TEAM's St. George said most ordinary people don't possess capital gains and therefore
don't benefit from the tax break. He also said there's no evidence that the tax break has
actually encouraged more investment.
As a less-preferred second alternative to raising revenue, St. George said the state could
consider raising the sales tax. When measuring what percentage of the overall tax-take is
made up of sales taxes, Massachusetts ranks 45th among the states, he said.
"Is that a reasonable place to look for revenues? It could be," St. George said. "There are
problems with it. It is not the first place we would prefer to look."
Other advocacy groups are looking for creative ways to raise money for their programs.
Environmental League representatives today suggested that the state could re-impose a tax
on pesticide use, and use the money to pay for a new program limiting pesticide use on
school grounds. ELM also expressed support for bills to tie the gas tax and motor vehicle
excise tax to gas mileage, a proposal that's intended to discourage the use of gas-guzzling
SUVs and trucks.