I am both puzzled and disappointed by the current budget talks on Beacon Hill. Much of the analysis pits the benefits of those who are struggling to meet their basic needs against those of our wealthiest residents (“House’s tax plan echoes Healey’s ‘competitiveness’ goals,” Metro, April 12). Why is it assumed that the only way to retain the wealthy is to give them a tax break?
Don’t these citizens already live in comfortable homes, send their children to good schools, and enjoy nice vacations? Wouldn’t their lives, like those of the rest of us, be enhanced by providing secure housing and great educational opportunities to all of the Commonwealth’s children? Like the rest of us, don’t they wantreliable transportation, environmentally sustainable infrastructure, public art, and glorious parks? Until we can fully fund all these priorities, shouldn’t we hold off on talking about refunds to the most fortunate?
Last November, voters sent a message by voting for the Fair Share Amendment: the rich should pay their fair share so that we can invest in public education and infrastructure. For years, the Legislature has used the line “We don’t have the money” to justify inaction and underinvestment. We got them the money.
But on Thursday, the MA House made clear that they plan to give money right back to the rich and large corporations by passing a tax cut package filled with giveaways to the richest residents of the Commonwealth. And that’s not okay.
The House vote was 150 to 3, with only Rep. Mike Connolly (D-Cambridge), Rep. Dan Sena (D-Acton), and Rep. Erika Uyterhoeven (D-Somerville) voting no. If they are your representatives, you should reach out and thank them. With the exception of a few absent representatives, all others voted yes, and if your representative voted to undermine Fair Share like that, they need to hear about your disappointment. Read more about the vote here.
But the fight isn’t it over.
Here’s how you can act.📣
The tax plans proposed by the Governor and the House include hundreds of millions of dollars in unecessary giveaways to the ultra-rich and large corporations. But the Senate can take a different path.
Call your State Senator TODAY 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.
“The disappointing thing about this is that many people were looking forward to having a Democratic trifecta,” said Jonathan Cohn, policy director of Progressive Massachusetts.“But they weren’t hoping to have a Democratic trifecta get tax breaks for day traders and speculators.”
Last November, voters sent a message by voting for the Fair Share Amendment: the rich should pay their fair share so that we can invest in public education and infrastructure. For years, the Legislature has used the line “We don’t have the money” to justify inaction and underinvestment; we got them the money.
But on Thursday, the MA House made clear that they plan to give money right back to the rich and large corporations by passing a tax cut package filled with giveaways to the richest residents of the Commonwealth. Last year, many representatives were quite clear that they intended for the new revenue from the Fair Share Amendment to be fully additive, rather than backfilling cuts. Even though the House laid out promising and important uses for the constitutionally dedicated funds, voters should wonder how much legislators believe their own pledges given the permanent tax cuts they just passed.
The vote was 150 to 3, with only Rep. Mike Connolly (D-Cambridge), Rep. Dan Sena (D-Acton), and Rep. Erika Uyterhoeven (D-Somerville) voting no.
Almost half of the cost of their tax proposal comes from the three regressive tax cuts:
A $231 million cut to the estate tax designed to disproportionately benefit the wealthiest estates
A $130 million cut for day traders and speculators by cutting the short-term capital gains tax
A $79 million tax cut for the state’s largest corporations through what is called “single sales factor apportionment”
Think of all that we could do with $440 million if instead we invested it in our public transit systems, in education, in child care, in climate resilience, in affordable housing, or in health care. Indeed, tackling our housing crisis should be the #1 priority if legislators actually cared about the goals of “affordability” and “competitiveness.” By passing such regressive tax cuts, the House is disrespecting the will of the voters, and they are setting Massachusetts up for brutal cuts when the next recession hits.
Even the less regressive parts of the tax package could go further if invested in robust social programs. The House bill would spend $40 million on an increase in the Renters Deduction from $3,000 to $4,000. However, this in reality, only yields to a tax credit of up to $50 for eligible renters. An extra $50 in the pocket of renters ultimately won’t go very far, given escalating rents and costs in general. As Rep. Mike Connolly pointed out, the state could have used the same money to guarantee all renters access to legal counsel in eviction cases, a measure with far lasting benefits.
The largest part of the tax package is the child and family tax credit, which would amount to $600 per child under 13 or dependent adult and cost $487 million. As I noted before, it is unclear why parents of teenagers should not get the same benefit: any parent of a teenager will tell you how much it costs to feed a teenager. Families with low and middle incomes will certainly benefit from extra money in their pocket, but $600 will not last long given that two weeks of child care costs more than that. The credit thus does little to address the real drivers of the cost of living in Massachusetts, even if it can help around the edges.
A more progressive part of the House’s tax package that was not in the Governor’s proposal was the expansion of the Earned Income Tax Credit (EITC), which would benefit about 396,000 taxpayers with incomes under $57,000, and would cost $91 million. However, it is important to remember that the EITC was originally a conservative proposal, born of opposition to a strong minimum wage and a robust safety net.
According to Mass Budget, we could make all public colleges and universities in the state tuition-free — or make all community colleges debt-free — for approximately $1 billion. State legislators would demand that such a proposal be funded. So why shouldn’t their tax expenditures have to be funded as well?
The Progressive Massachusetts group zeroed in on the estate tax, short-term capital gains tax and single sales factor apportionment reforms collectively worth about $440 million as pressure points. During its lobby day earlier on Thursday, the organization slammed those measures as “regressive” and likely to blunt the impact of a newly voter-enacted surtax on high earners.
“Think of all that we could do with $440 million if instead we invested it in our public transit systems, in education, in child care, in climate resilience, in affordable housing, or in health care,” the group wrote in a handout from its event. “Indeed, tackling our housing crisis should be the #1 priority if legislators actually cared about the goals of ‘affordability’ and ‘competitiveness.’”
Last November, voters sent a message by voting for the Fair Share Amendment: the rich should pay their fair share so that we can invest in public education and infrastructure. For years, the Legislature has used the line “We don’t have the money” to justify inaction and underinvestment; we got them the money.
But, yesterday, the House, in unveiling their tax package, said that they plan to give money right back to the rich and large corporations.
Almost half of the cost of their tax proposal comes from the three regressive tax cuts:
A $231 million cut to the estate tax designed to disproportionately benefit the wealthiest estates
A $130 million cut for day traders and speculators by cutting the short-term capital gains tax
A $79 million tax cut for the state’s largest corporations through what is called “single sales factor apportionment”
Think of all that we could do with $440 million if instead we invested it in our public transit systems, in education, in child care, in climate resilience, in affordable housing, or in health care. Indeed, tackling our housing crisis should be the #1 priority if legislators actually cared about the goals of “affordability” and “competitiveness.” Indeed, even the less regressive parts of the tax package could go further if invested in a robust social programs. By proposing such regressive tax cuts, the House is disrespecting the will of the voters, and they are setting Massachusetts up for brutal cuts when the next recession hits.
You can also let your state representative know (on phone or in person tomorrow) that you want them to support two amendments filed by Rep. Mike Connolly:
#5 (Establishing a Tiered Corporate Minimum Tax), which ensures that large corporations pay their fair share [When corporations, through accounting wizardry, secure a $0 tax liability, the minimum tax they have to pay is $456. That tax should be based on the size of the corporation.]
#11 (Maintaining Some Degree of Short-Term Capital Gains Equity) to blunt the cut to the short-term capital gains tax
“To progressive Democrats, the answer is not enough. Pointing out that Healey’s tax reform proposal is basically the same as Baker’s, Jonathan Cohn, policy director of Progressive Massachusetts, said, “Her instinct has been to give that money back, weakening our state’s ability to deliver on the promise of investment.” On housing and transit, he added, “I think we need to see more from her administration about what their major goals are and how they would track their own success. There isn’t enough communicated urgency about what is needed for the affordability crisis and the crisis of the MBTA.” Cohn also flagged Healey for a “wait-and-see” attitude on zoning changes that are aimed at increasing affordable housing.””
The proposal drew criticism from some voices on the left. “Our Democratic governor and Democratic Legislature fighting hard for the day traders … ,” tweeted Progressive Massachusetts Political Director Jonathan Cohn.
This spring, the Massachusetts House and Senate will be voting on their budgets for the next fiscal year, and it’s critical that they make sure to complete and protect last year’s victories when doing so.
What does that mean?
First, that means protecting last year’s win on the ballot for the Fair Share Amendment. Voters were clear about wanting the rich to pay their fair share and for us to invest in our public education and infrastructure. However, Governor Healey’s proposed budget would give away almost as much in tax cuts as is estimated to be raised by Fair Share, undermining the hard work that went into that campaign. In particular, almost $400 million of her tax package consists of regressive tax cuts that will go to speculators and major estates. We need to make sure to protect the revenue we raised so that we can realize the vision of better schools, better roads, and better transit for all.
Second, last summer the MA House and MA Senate both included language from the No Cost Calls bill in their budgets, but a veto from Governor Baker doomed its fate. The Legislature needs to complete the No Cost Calls win by including language to permanently guarantee that neither state nor county prisons or jails will continue the predatory practice of charging incarcerated individuals and their loved ones for phone calls.
