The #TechTax: Confusing, Narrow, Arbitrary. What's A Progressive Alternative?

The troubles with the “tech tax” have been highlighted by many inside and outside the business community, and it looks to us like the right call to repeal and replace it.

But now that we’re talking taxes again... let’s remember that the only reason the Legislature has had to try to scrape together new revenue from niche sources (like the tech industry) in the first place is because they have consistently refused to address the obvious problems --address our real revenue needs AND our regressive tax structure -- or consider the viable progressive solutions. The silver lining of the tech tax debate is that the Legislature now has the opportunity to take action and do it right this time.

[expand title="Budget Cuts Undermine Our Commonwealth (chart)"]

A decade of budget cuts has been undermining our communities and future economic strength:

We've Been Cutting

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[expand title="The Poor Pay the Most in Mass. Taxes (graph)"]

Our tax burdens are unfairly distributed -- the poor pay the most, the wealthiest, the least:

The Poor Pay The Most

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Innovation Requires Investment

Massachusetts cannot be an innovation and jobs leader if we continue to undermine our education and infrastructure through neglect and ever more drastic cuts. And we cannot continue to rely only on increases in those taxes that disproportionately burden those who can least afford it (as with the gas tax and sales tax).

We advocate reversing this damaging austerity trend, and a renewing investment in Massachusetts’s economic future.

We advocate an increased income tax, structured in such a way to protect middle-class and lower income families and seniors from burdensome increases, such as in "An Act to Invest in Our Communities."

Unlike the tech tax, which targeted one sector of the economy in a complicated and unfair fashion, an income tax/personal exemption increase would be:

1) Fair -- People making less pay less; when you do better, you pay a little more, which reduces the overall regressivity of our Massachusetts tax system (the poor pay disproportionately MORE of their income than the wealthy, who pay the LEAST]).

2) Simple -- it applies to everybody.

3) Predictable -- Businesses need to be able to rely on a stable, predictable tax structure to know how plan ahead to grow their business and create jobs.

Now that the topic of funding our Commonwealth is on the table again, Legislators should be reminded that there are good alternatives, such as “An Act to Invest in Our Community", already on the table (and which could have helped avoid the whole tech tax mess in the first place).

We have four questions for our Legislators:

1. Now that the Tech Tax is about to be repealed, what are you doing to make sure we adequately and responsibly invest in our Massachusetts communities and future economic strength?

2. It was unfair to target the tech industry; it’s also unfair that the poor pay more than the rich in MA! What are you doing to change our regressive taxes?

3. Will you support a modestly increased Income Tax, designed to protect the poor, middle-class and vulnerable (as in “An Act to Invest in Our Communities”)?

4. The legislature rejected the Governor’s proposal in the spring, with many legislators complaining of its complexity. “An Act to Invest in Our Communities” is much simpler. Will you push to bring it to a vote?

After the disappointing votes on this in the spring, we have no illusions that this legislature is going to increase the income tax, even if what’s right is also smart and fair. But they ought to be reminded of the road they’re not taking.

For your convenience, here’s a list of Legislators’ contact info, including a growing list of Legislators' twitter and facebook accounts: progma.us/MAlegislators

 

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