Tuesday, March 28, 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, multi-issue grassroots advocacy organization with chapters across the commonwealth committed to fighting for a more equitable, just, sustainable, and democratic Massachusetts.
Because of our commitment to a vision of shared prosperity, we have been involved with the Fair Share Amendment campaign from the start, and last year, we knocked over 100,000 doors for Question 1 — not to mention the work of phone banking, text-banking, tabling at community events, and talking with friends and neighbors. Everyday people around the commonwealth got involved with the campaign because they realized the need for a fairer code and the transformative potential of the investments we could make with new revenue.
They understood that more revenue could mean greater reinvestment in schools to ensure that buildings are safe, green, and healthy; to address the social and emotional needs of students coming out of a pandemic; to ensure that underpaid professionals get the compensation they deserve; and to deliver on the promise of the Student Opportunity Act. They understood that more revenue could mean changing course from our decades-long disinvestment from public higher education and instead guaranteeing better pay for faculty and staff and ensuring that students can graduate without debt. They understood that more revenue could mean finally fixing the MBTA so that the buses and trains run frequently, reliably, and safely — as well as to more places and at lower cost. They understood that more revenue could mean fixing our roads so that they are no longer ridden with potholes and upgrading structurally deficient bridges that plague so many communities.
The voters understood too, delivering a win for Question 1 in November. Massachusetts voters were clear: make sure the rich pay their fair share so that we can invest in our education and infrastructure.
Elected officials said that the barrier to doing important things was money, so we went out and made sure to organize and mobilize to get that revenue. And the Governor’s proposal would give it right back.
Regressive tax cuts account for almost $400 million of Gov. Healey’s tax proposal. The proposed cut to the short-term capital gains tax would be bad for the economy, by encouraging more speculative activities such as rapid stock trading and “flipping” real estate, and it would be deeply regressive, as the highest-income 1 percent of households would receive almost eighty percent of the tax cut at an average of over $7,000 apiece.
The proposed cut to the estate tax is also deeply regressive. We can acknowledge that “cliffs,” as exists in the estate tax, are not good policy designs, but that should not lead to excluding estates up to $3 million and providing a $182,000 tax cut to estates even larger than that. There is no world in which a $10 million estate needs an extra $182,000. If the Legislature would like to update the estate tax, it should heed proposals like H.2960/S.1784: An Act relative to estate tax reform, which would only lift the exemption threshold to $2 million and would provide no tax breaks to larger estates. Such a proposal, in contrast to the Governor’s, would preserve most of the revenue-generation, inequality-reduction, and fairness benefits of the estate tax, while eliminating the current cliff effect.
Other parts of the Governor’s tax proposal are, fortunately, not so regressive, but they still do little to address the cost of living in Massachusetts. A child tax credit providing $600 per child under 13 would not even cover two weeks of child care. An expanded renters deduction would lead to merely $50 more for renters, if they even qualify. Tax credits are an inefficient way to meet the very real needs of caregivers and renters, and the Legislature must act swiftly to pass legislation to address the high cost of child care and the impact of escalating rents. If the Legislature would like to advance the Governor’s tax credits, they should be paid for with progressive, revenue-raising changes to the tax code, so that they do not drain down payments on transformative policy that actually addresses the high cost of living.
Massachusetts needs robust state revenue if we want to take action to address the child care affordability crisis, the housing affordability crisis, growing student and medical debt, the climate crisis, and an often-malfunctioning transit system. Moreover, as the federal government seems headed for debt-ceiling brinkmanship, Republican-led austerity, and the sunset of COVID-era aid, Massachusetts will likely see greater need for state revenue to fill in the gaps. Now is not the time for permanent, regressive tax-cutting.
Sincerely,
Jonathan Cohn
