revenue

Daily Collegian: Debating the Effectiveness of New Tax Cuts

Sam Cavalheiro, “Massachusetts passes first tax cuts in almost two decades,” Daily Collegian, October 23, 2023.

Jonathan Cohn, Policy Director at Progressive Massachusetts (a progressive policy advocacy group,) was disappointed at the new tax law as he felt it only focused on cutting taxes.

Cohn explains that Massachusetts voters, in the most recent election, voted out a Republican governor who was fiscally conservative and passed an increase on taxes on the wealthy, called the Fair Share Amendment.

“Shifting the entire discussion to cutting taxes feels like ‘Wait, what just happened in the last election?’ It’s just not the best use of that in the political moment,” he said.

Cohn argues that the tax cuts do little to make Massachusetts an affordable place, referencing the Child Tax Credit Expansion: “…raising that child tax credit of $440 is ultimately not going far for people given how expensive children are. In Massachusetts, the cost of childcare is over $20,000 a year and saying that their tax credit is [going to] go up from $140 to $440 over a few years, that’s not a significant amount.”

He also argues that the rental deduction will do little to make Massachusetts more affordable: “What the expansion of the rental deduction means maybe $50 more for many renters… and many people see their rent increase each year by more than $50.”

Cohn criticized the short-term capital gains cuts and estate tax cuts, which mostly affect wealthier residents. He questions who the tax cuts are benefiting.

“Is it disproportionately benefiting those who already have high incomes or is it benefiting the people who are really struggling with being able to afford to live in Massachusetts?”

revenue

Testimony: Tackling Affordability Requires Investment

Wednesday, October 11, 2023

Chair Moran, Chair Cusack, and Members of the Joint Committee on Revenue:

My name is Jonathan Cohn, and I am the policy director at Progressive Massachusetts. We are a statewide, multi-issue, grassroots membership organization focused on fighting for policy that would make our Commonwealth more equitable, just, sustainable, and democratic.

We have heard a lot from the Legislature recently about wanting to take action on affordability, as the cost of living in Massachusetts has become increasingly unsustainable for many. However, contrary to recent steps, we cannot tax-cut our way into affordability. We need to invest. And that, of course, requires money.

We urge you to give a favorable report to the following bills:

S.1771 / H.2747: An Act granting a local option for a real estate transfer fee to fund affordable housing, filed by Sen. Jo Comerford and Rep. Mike Connolly.
S.1799 / H.2894: An Act providing for climate change adaptation infrastructure and affordable housing investments in the Commonwealth, filed by Sen. Jamie Eldridge and Rep. Sam Montaño
S.1834 / H.2824: An Act to support educational opportunity for all, filed by Sen. Adam Gomez, Rep. Natalie Higgins, and Rep. Christine Barber

Transfer Fee (S.1771/H.2747)

Our cities and towns need every tool in the toolbox to address our state’s housing crisis, and this bill would provide a crucial one. By imposing a small fee on high-end real estate transactions, communities will be able to provide much-needed funding to affordable housing trusts so that we can preserve and expand affordable housing stock. These bills recognize that each community’s housing situation is different and thus enable cities and towns to craft the proposal that best fits their community’s needs.

Cities and towns from across the Commonwealth have already filed home rule petitions to do this. When our cities and towns want to become places where people can afford to live at every stage of life, the State Legislature should support them, not be a roadblock.

HERO bill (S.1799/H.2894)

This bill offers another tool for responding to our affordable housing crisis and, moreover, recognizes the need for not just affordable housing but green and healthy communities as well.

Initiated by the Housing and Environment Revenue Opportunities (HERO) Coalition, it would raise the deeds excise fee to a value still lower than comparable fees in Connecticut, New Hampshire, New York, and Vermont to raise dedicated revenue for climate resilience and affordable housing.

The estimated $300 million from this bill could go toward steps like creating or preserving additional housing for 18,000 working-class homeowners and renters over 10 years; financing hundreds of millions of dollars in competitive, flexible grants to localities for climate resilience and mitigation; or assisting between 3,500 and 6,500 additional extremely low-income families per year with housing vouchers or project-based rental assistance.

Educational Opportunity for All (S.1834/H.2824)

Massachusetts is lucky to be home to many world-class universities. But these large institutions, despite often operating indistinguishably from for-profit institutions, do not have to pay taxes. Given their large footprint, that is a fiscal drain for many communities across the Commonwealth, especially given the fact that such private universities will only ever educate a small percentage of the Commonwealth’s residents.

The endowment of Harvard University stood at over $50 billion last year; MIT, over $20 billion.

These bills recognize that such affluent institutions have the ability to contribute more. They would put a small excise fee on the part of a university’s endowment over $1 billion to create dedicated revenue for a fund subsidizing the cost of higher education, early education, and child care for lower-income and middle-class residents of the commonwealth.

Governor Healey and House and Senate leaders have all spoken about wanting to take action on the exorbitant cost of child care, early education, and higher education, and this bill offers a sensible and dependable way of raising the funds to do so.

Thank you for all your work on today’s hearing, and again, we urge you to swiftly advance these bills.

Sincerely,

Jonathan Cohn

Policy Director

Progressive Massachusetts

Here’s What Fair Share Is Delivering in its First Year

Last year, voters like you showed up in November to vote for the Fair Share Amendment because you understood the importance of a fairer tax code and greater investment in public education and transportation. And you didn’t just show up to vote — you canvassed, phone-banked, text-banked, tabled, spoke to neighbors, and much more.

Now that Governor Maura Healey has signed the FY 2024 budget, we can see how much the Fair Share Amendment has delivered in its first year. Let’s take a look.

$229 million for public colleges and universities
$224 million for K-12 public schools
$70.5 million for early education and care
$175 million for roads and bridges
$95.7 million for regional public transit
$205.8 million for the MBTA

✅$229 million for public colleges and universities ✅$224 million for K-12 public schools ✅ $70.5 million for early education and care ✅$175 million for roads and bridges ✅$95.7 million for regional public transit ✅$205.8 million for the MBTA

For early education and K-12 public education, that means….

For early education and care, that means $25 million for reducing the early education and care waitlist, $15 million for additional early education and care slots, $25 million for early educator and pay benefits, $5.5 million for expansion of pre-K. For K-12, public schools, that means....$150 million for school building projects and green schools, $69 million for universal school meals, $5 million for early college programs

For public higher education, that means….

For roads, bridges, and regional transit, that means….

For roads and bridges, that means $100 million for municipal roads and bridges, $50 million for state bridges, and $25 million for federal matching funds. For regional transit, that means $90 million for regional transit agencies(funding fare-free pilot program, expanded service hours, weekend services, and route expansions) and $5.7 million for ferry service.

For the MBTA, that means…

(See a written version of this information here.)

But Wait…The Fight Continues

The new revenue raised by the Fair Share Amendment could be at risk this fall if the Legislature passes major tax giveaways for the ultra-rich and large corporations.

Massachusetts needs to prioritize spending on what will make our state truly affordable, equitable, and competitive: programs that support working people and ensure a labor force adequate to our economy’s needs. That, in turn, requires that families have affordable housing, childcare, educational opportunities, and reliable transportation to make it possible for them to work, gain skills, and earn a good living.

We need to act NOW to protect the Fair Share Amendment from tax avoidance, and ensure that Massachusetts can invest more in our schools, colleges, roads, bridges, and public transit systems. At the same time, we need to make sure our legislators don’t give away billions of dollars to the ultra-rich.

Can you write to your state legislators to thank them for the budget victories and urge them to protect Fair Share revenue?

Fair Share public education public transit revenue tax fairness

Urge your State Legislators to Reject Permanent Tax Breaks for the Ultra-rich

Over the coming weeks, a group of six legislators (3 from the House and 3 from the Senate) are negotiating the final details of a tax package.

Back in April, the House passed a fairly regressive tax package, filled with tax cuts for the ultra-rich and large corporations. The Senate, a few weeks ago, passed a more equitable tax package.

At a time when the state’s economic outlook is uncertain, and working families are struggling to get ahead, Massachusetts needs to prioritize spending on what will make our state truly affordable, equitable, and competitive: programs that ensure a labor force adequate to our economy’s needs, not tax cuts for the ultra-rich.

That group of six negotiators, called a “Conference Committee,” consists of Senate Ways & Means Chair Michael Rodrigues (D-Westport), Senate Revenue Chair Susan Moran (D-Falmouth), Senate Revenue Ranking Minority Ryan Fattman (R-Sutton), House Ways & Means Chair Aaron Michlewitz (D-North End), House Revenue Chair Mark Cusack (D-Braintree), and House Revenue Ranking Minority Michael Soter (R-Bellingham). And they need to hear from your legislators.

Can you write to your legislators today to ask them to urge the Conference Committee to reject permanent tax cuts for the ultra-rich and large corporations?

We’re joining Raise Up Massachusetts in support of five key demands for the Conference Committee.

Reject the proposed cut to the short-term capital gains tax, which would overwhelmingly benefit wealthy investors who are engaged in complex hedged investment strategies.
Reject the expansion of the corporate tax policy called ‘single sales factor apportionment,’ which gives a massive tax break to large, profitable multinational corporations that already don’t pay their fair share.
Minimize the budgetary cost of estate tax reform by limiting the benefits that are extended to estates above $2 million
Protect the revenue from the Fair Share Amendment by closing the “Single Filing Loophole,’ which could prevent Massachusetts from losing between $200 and $600 million in Fair Share revenue each year.
Make the outdated 62F tax giveaway system more fair by ensuring an even distribution of any future 62F rebates, rather than maintaining the current system that overwhelmingly benefits the ultra-rich, out of proportion with their contribution to overall state taxes.

Can you write to your legislators today to ask them to urge the Conference Committee to reject permanent tax cuts for the ultra-rich and large corporations?

revenue

Universities and Hospitals Should Pay Their Fair Share. PILOT Reform Would Help.

Thursday, July 23, 2023

Chair Moran, Chair Cusack, and Members of the Joint Committee on Revenue:

My name is Jonathan Cohn, and I am the Policy Director of Progressive Massachusetts, a statewide grassroots advocacy group committed to fighting for an equitable, just, democratic, and sustainable Commonwealth.

We urge a favorable report for H.2963 and S.1836: An Act relative to payments in lieu of taxation by organizations exempt from the property tax (Rep. Uyterhoeven & Sen. Gomez).

Massachusetts is lucky to be home to many world-class hospitals and universities. But these large institutions, despite often operating indistinguishably from for-profit institutions, do not have to pay taxes. Given their large footprint, that is a fiscal drain for many communities across the Commonwealth, especially as communities are looking to find much-needed funds for investments in schools, housing, and infrastructure.

This bill would address this discrepancy by requiring large hospitals and universities to pay 25% of commercial property taxes to municipalities, based on the Payment in Lieu of Taxes (PILOT) agreement in Boston. Under this bill, municipalities could opt in to requiring a mandatory PILOT rather than having to engage in drawn-out negotiations or chasing down institutions one by one.

Why 25%? This number reflects the costs posed by such large institutions to municipal services like police, fire departments, and departments of public works. It is still a good deal for the institutions, who are still paying far less in property taxes than an individual would have to pay. And, by applying only to institutions with property worth over $15 million, the bill would avoid risking any adverse impact on smaller institutions.

We need to be empowering municipalities to take action to address the many crises before us, but they need the funds to do so. Our cities and towns are severely limited in how they can raise funds, as municipal budgets are disproportionately based on property taxes—and we are stuck living in the misguided Reagan-era holdover of a “Prop 2 ½” regime. If our cities and towns have wealthy institutional neighbors, they shouldn’t be forced to be stuck in struggling fiscal straits.

Sincerely,

Jonathan Cohn

Policy Director

Progressive Massachusetts

revenue

Here’s How Your State Senator Voted in the Tax Reform Debate

Earlier tonight, the MA Senate passed a $586 million tax reform package. As I noted earlier today, the MA Senate’s tax reform package was a much better proposal than the House’s:

The Senate bill rejects the proposed $117 million tax cut for day traders and speculators proposed by Gov. Healey and passed by the MA House in April. Notably, both chambers rejected this idea last year when Governor Baker proposed it.
The Senate bill rejected a $79 million corporate tax giveaway that the House back in April with no public debate.
The Senate bill offers a less expensive and less regressive cut to the estate tax than either Governor Healey or the MA House. Unfortunately, every estate tax proposal includes tax cuts for the largest estates rather than limiting them to more modest estates subject to the tax.

During the debate, the Senate voted to protect the Fair Share victory from last year by closing tax loopholes and defeating attempts to give more tax cuts to the rich; however, the Senate unfortunately also rejected an attempt to improve our state’s response to the affordable housing crisis.

THE GOOD

The Senate voted 33 to 5 for an amendment from Sen. Jason Lewis to close a joint filing loophole that could have led to the loss of $200 million of Fair Share revenue each year. It would have required couples that jointly file their federal taxes to do so in Massachusetts as well. Without this technical change, Massachusetts would remain the only state with an additional tax code for higher incomes without either an incentive for couples to file jointly or a prohibition against their filing separately. Such a loophole would encourage tax avoidance through the illegal misattribution of income.

Two Democrats–Sen. Barry Finegold of Andover and Sen. Michael Moore of Millbury–joined the 3 Republicans in voting no.

The Senate defeated, by a vote of 32 to 5, a proposed Republican tax giveaway to day traders and speculators. Only Barry Finegold (D-Andover), Walter Timilty (D-Milton), and the three Republicans voted for it.

The Senate defeated, by a vote of 33 to 5, a regressive and fiscally irresponsible Republican attempt to raise the estate tax threshold to $5 million, which would have given hundreds of thousands of dollars to such multi-million-dollar estates. Only Nick Collins (D-South Boston) and Walter Timilty (D-Milton), and the three Republicans voted for it.

The Senate defeated, by a vote of 32 to 6, a second Republican effort to erode the revenue raised by the estate tax. Only Nick Collins (D-South Boston), Walter Timilty (D-Milton), John Velis (D-Westfield), and the three Republicans voted for it.

THE BAD

The Senate’s tax package expands the Housing Development Incentive Program, which provides millions in state tax credits and local tax breaks for developers of market-rate housing in Gateway cities. However, the units built through these incentives can be shockingly expensive, and incentives often go to areas that are already attractive to developers.

According to an analysis from the Mass Law Reform Institute, more than half of HDIP funds go to only five of the 26 Gateway cities, only 2% of HDIP units are affordable, and rents routinely exceed prevailing wages and prices. We need to build more housing, but our public dollars should be going toward affordable housing if we want to meaningfully address our housing crisis.

In response, Sen. Jamie Eldridge (D-Acton) offered an amendment to create basic affordability standards for HDIP projects: a requirement that at least 20% of the units created in any HDIP-funded project be permanently affordable.

Despite our large Democratic supermajority, the commonsense amendment was defeated 30 to 9.

If your senator was one of the 9 who stood up to Senate Leadership to vote yes, make sure to thank them.

revenue tax fairness

What to Say to Your State Senator about Today’s Tax Vote

Since last year’s Fair Share victory, our state’s super-rich and their allies in the media have been pushing a myth that we need to cut taxes on the rich to prevent people from leaving Massachusetts. Even though this has been widely debunked, Governor Healey heeded such demands by proposing a tax reform package skewed toward the very rich. The House, back in April, followed suit.

The Senate is taking up its own tax package this afternoon. So take some time this morning to email your state senator about protecting the Fair Share victory and better responding to our housing crisis — then read on for more.

Saying No to Tax Cuts for the Super-Rich and Large Corporations

Let’s start with some good news:

The Senate bill rejects the proposed $117 million tax cut for day traders and speculators proposed by Gov. Healey and passed by the MA House in April. Notably, both chambers rejected this idea last year when Governor Baker proposed it.
The Senate bill rejected a $79 million corporate tax giveaway that the House back in April with no public debate.
The Senate bill offers a less expensive and less regressive cut to the estate tax than either Governor Healey or the MA House. Unfortunately, every estate tax proposal includes tax cuts for the largest estates rather than limiting them to more modest estates subject to the tax.

Voters last year were clear that they wanted the super-rich to pay more so that we can invest in our schools and infrastructure, so it’s important that senators hold the line here in today’s vote and in negotiations to come.

Housing: The Real Reason Why People Are Moving out of MA

High-ranking senators have rightly noted that the reason people are moving out of MA is not taxes–it’s the high cost of housing. However, the Senate’s proposals on housing are mixed. Although the expansion of the low-income housing tax credit can help our state address a growing housing crisis, increasing the Housing Development Incentive Program (HDIP) without accountability or affordability measures is a false solution.

The HDIP program provides millions in state tax credits and local tax breaks for developers of market-rate housing in Gateway cities. However, the units built through these incentives can be shockingly expensive, and incentives often go to areas that are already attractive to developers. Moreover, the program lacks basic monitoring and oversight to ensure that it is achieving desired ends. Only with affordability and accountability requirements can the program be part of the solution to our housing crisis.

How Your Senator Can Make the Bill Better

Your senator can better protect Fair Share and better respond to our housing crisis by supporting these three amendments:

Amendment #16 (Sen. Eldridge): Improve HDIP to create affordable housing, which would ensure that HDIP funds support badly needed mixed income housing by requiring developments funded under the program to have at least 20% permanently affordable housing.
Amendment #19 (Sen. Eldridge): Improve transparency of HDIP program, which would establish regular reporting on the awarding of such tax incentives
Amendment #26 (Sen. Lewis): Reducing high income tax avoidance, which would protect the revenue raised by the Fair Share Amendment by ensuring that couples who file jointly on their federal taxes do so in Massachusetts as well.

Can you email your state senator this morning about supporting these three amendments?

revenue tax fairness

“Those solutions share one thing in common: they all require money.”

Tuesday, May 16, 2023

Chair Moran, Chair Cusack, and Members of the Joint Committee on Revenue:

This year so far, the Legislature’s discussion about “tax reform” has centered on how to roll back taxes. The framing of “tax relief” has unfortunately warped discussion of the major issues facing our Commonwealth. “Tax relief” implies that taxes are a burden harming our Commonwealth rather than our collective investments in our collective well-being. And the framing of “tax relief” displaces discussion from the real burdens faced by residents of the Commonwealth: the high cost of housing, the high cost of health care, the high cost of child care, the high cost of higher education, long hours in traffic, a malfunctioning transit system—the list goes on.

Addressing those true burdens that Commonwealth residents face requires many disparate policy solutions, but they share one thing in common: they all require money. If we want to ensure that our students get the best education possible from pre-K to postsecondary, that everyone has the best health care possible, that everyone has a safe roof over their head, that everyone can get to where they need to go efficiently, cleanly, and safely, that everyone has clean air to breathe, then we need to raise the revenue to do it. Our new Governor has outlined proposals to move us closer to such goals, but they will exist only on paper if not backed by funding.

As such, we urge you to broaden the discussion of “tax reform” to think about how the Commonwealth can make a more progressive tax code that enables us to do right by all our residents.

Please give a favorable report to the following bills:

H.2708/S.1925: An Act to close corporate tax loopholes and create progressive revenue (Barber & Uyterhoeven / Rausch)
H.2743 / S.1835: An Act establishing a tiered corporate minimum tax (Connolly / Gomez)
H.2967 / S.1858: An Act establishing a tax on excessive executive compensation (Uyterhoeven / Lewis)
H.2856 / S.1788: An Act relative to restoring corporate tax rates (Keefe / DiDomenico)
H.2725/S.1875: An Act requiring public disclosures by publicly-traded corporate taxpayers (Capano / Miranda)

To provide a quick note on each of these bills:

H.2708 and S.1925 would increase the share of GILTI income (“Global Intangible Low-Taxed Income,” or offshored income made in Massachusetts) that the state taxes from 5% to 50%. This could raise up to $450 million in additional revenue each year and would bring us in line with Maine, New Hampshire, and Rhode Island.

The corporate minimum tax—namely, the tax that corporations pay if they are able to wipe away all tax obligations through accounting tricks—is $456 and hasn’t budged since 1989 (the year after I was born, I might add). H.2743 and S.1835 would create a tiered structure for this minimum tax so that large corporations are paying their fair share.

By imposing additional taxes on corporations with excessive imbalances in how much they pay their C-suite executives versus their median employees, H.2967 / S.1858 would both raise revenue and reduce the Commonwealth’s sky-high income inequality.

A decade ago, Massachusetts lowered the tax rate on corporate profits from 9.5% to 8.0%. H.2856 and S.1788 would reverse that change to, again, make sure corporations are paying their fair share. According to MassBudget, each 1 percentage point increase in the rate could generate between $200 -$300 million in additional annual tax revenue.

Large corporations pay teams of lawyers to help them avoid paying taxes. We know that this problem exists, but without disclosure, we cannot understand the totality of the problem and best calibrate our response. The disclosure requirements required in H.2725/S.1875 would help us do that.

Our Commonwealth has the resources to ensure the best for all our residents, but we need to commit to realizing such a vision through our policy.

Sincerely,

Jonathan Cohn

Policy Director

Progressive Massachusetts

revenue

“Senators Should Treat This Report as a Red Light”

Earlier this week, Massachusetts reported April state tax revenues $1.6 billion short of what officials originally projected.

As Raise Up Massachusetts said in a statement, “Senators should treat this report as a red light. Rather than cutting taxes for the wealthy, they should focus on making sustainable investments in affordability for working families.”

In the face of a possible economic downturn and a debt-ceiling showdown (and possible looming government shutdown) on the federal level, continuing to move forward with tax cuts for the ultra-rich and large corporations isn’t just inequitable — it’s reckless, setting our state up for deep cuts to necessary programs and services.

Can you write to your state senator today about opposing tax cuts for the ultra-rich and large corporations?

Even better: Make a call! You can find your senator’s phone number here and a phone script at https://raiseupma.us/script.

And when you’re done: Can you think of three friends to reach out to as well?

revenue

Three Quick Actions to Take This Weekend

Here are three quick actions that you can take this weekend.

Ask of Gov. Healey: Pause New Gas Infrastructure

Happy Earth Day! The science has long been clear: we need to rapidly transition away from fossil fuels and toward renewable energy. If we know that there can be no long-term future for fossil fuel infrastructure, then we need to stop expanding it and creating a lock-in effect for decades to come, with negative health and environmental impacts on surrounding communities.

Governor Healey has spoken of climate as a top priority, so she should show that commitment by pledging to halt new gas system expansions until the state has a concrete plan for a just transition to a clean — and green — energy future.

Can you join Mass Power Forward in calling on her to do so?

Ask of Your State Senator: Protect Fair Share

The tax plans proposed by the Governor and the House include hundreds of millions of dollars in unnecessary giveaways to the ultra-rich and large corporations.

But the Senate can take a different path.

Call your State Senator and ask them to:

REJECT the proposed cut to the short-term capital gains tax that would overwhelmingly benefit wealthy investors;
REJECT expanding the ‘single sales factor apportionment’ that would give a massive tax break to large, profitable multi-state corporations;
TARGET any estate tax reform exclusively to moderate estates, with no tax breaks to large multi-million-dollar estates; AND
USE THOSE SAVINGS to invest in affordable housing, childcare, and reliable transportation.

Don’t know your State Senator’s phone number? Find it here, and then save it in your phone for next time.

And then after you make that call, can you follow up with an email?

And if you’re free this upcoming week, sign up for a phone bank with Raise Up Mass so that we can drive more calls to legislators.

Tuesday, April 25, 4 pm to 7 pm
Wednesday, April 26, 4 pm to 7 pm
Thursday, April 27, 4 pm to 7 pm

Ask of Your State Rep: Support No Cost Calls

The good news is that the MA House included No Cost Calls language — that is, ending the predatory practice of prisons and jails charging incarcerated individuals for phone calls to loved ones — in its FY2024 budget proposal.

However, there are additional steps necessary to strengthen the guarantee of access to such free phone calls. Rep. Chynah Tyler filed an amendment to the budget (Amendment #1559) to do just that, ensuring a stronger baseline of access (i.e., including access to tablets and setting a minimum guarantee for call time).

Can you call your state rep to ask them to support Amendment #1559 to the House budget?

Keeping Families Together: No Cost Calls. Rep Chynah Tyler, Amdt #1559

In solidarity,

climate decarceration revenue