Tuesday, June 6, 2023
Chair Moran, Chair Cusack, and Members of the Joint Committee on Revenue:
My name is Jonathan Cohn, and I’m the policy director of Progressive Massachusetts, a statewide, member-based grassroots advocacy organization fighting for a more equitable, just, sustainable, and democratic Commonwealth.
We urge you to give a favorable report to H.2964/S.1801: An Act to reform the charitable deduction, filed by Rep. Erika Uyterhoeven and Sen. Jamie Eldridge.
Legislative leaders have been talking about the importance of “progressive” tax reform. If we want to build on steps toward a more progressive tax code, such as last year’s passage of the Fair Share Amendment, one place worth attention is the charitable deduction, which recently took effect.
The charitable deduction will reduce state revenue by approximately $300 million annually, with disproportionate benefits to the richest residents of the Commonwealth. According to a 2020 analysis from the Massachusetts Budget and Policy Center, tax filers with more than $1 million in income would receive a benefit of almost $10,000 on average (amounting to more than half of the total benefits from the deduction). Those with income under $50,000 would receive just $7 on average (amounting to just 4% of the total benefits from the deduction).
This bill would address such disparities by limiting the charitable deduction to individuals who don’t also get such a deduction on their federal taxes: in other words, it would limit the deduction to low- and middle-income residents.
Voters were clear last year that they want to see a more progressive tax code and greater investments in our Commonwealth. Especially with the possibility of a recession in the near term, as well as a federal retrenchment from key social programs, now is not the time to be protecting tax cuts to the richest residents of the Commonwealth and eliminate a new “double dip” deduction.
Sincerely,
Jonathan Cohn
Policy Director
Progressive Massachusetts