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?

MA Doesn’t Need New Tax Giveaways for the Rich

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

Take Action: The MA Legislative Session Ends in TWO WEEKS

Did you know that the current legislative session at the MA State House ends in just two weeks?

That’s right: any bills that don’t pass between now and July 31st are done until next year (at the earliest).

That means that there will be a flurry of activity in the coming weeks, and we want to keep you in the loop.

Stop the MA Legislature from Giving Massive Tax Breaks to the Wealthiest Estates

The Massachusetts tax system hits the wallets of lower-income people harder than high earners, with the bottom 20% of earners paying a higher percentage of their income in state and local taxes than the top 1%. An exception is the Commonwealth’s relatively robust estate tax. The estate tax is one of the main policies we have focused on reducing the gaping racial wealth gap in Massachusetts.

Nonetheless, the Massachusetts House voted last week to roll back the estate tax, to the cost of $207 million. This lost revenue means money isn’t available for important investments or for tax relief for the struggling residents of the Commonwealth.

Even worse, the estate tax rollback was designed in a way that disproportionately benefits the largest estates, namely those over $3 million. This would be the biggest increase in the racial wealth gap in decades.

If legislators want to help comparatively smaller estates, they should design their design their policies to do so, not advance a costly giveaway to the wealthiest estates.

Can you write to your state senator to urge them to reject the House’s estate tax proposal?

Turn up the Heat: MA Needs Climate Action

A climate bill is in the works, but it hasn’t reached the Governor’s desk yet. Together, the provisions laid forth in the House and Senate proposed bills put Massachusetts in a good position to implement strategies to reduce our emissions 50% by 2030 – as required by law – and create healthier communities.

But these strategies cannot wait two years more to be passed into law! Let’s ensure that lawmakers finalize a climate bill that moves us toward our shared climate and justice goals.

The conference committee and House and Senate leaders must send a bill to the Governor’s deskby Thursday, July 21 to avoid the chance of a pocket veto by Governor Baker.

Your legislators need to hear from you: no climate bill is not an option! Advocates are circulating a public sign-on letter for legislators to show their support for moving this forward swiftly. Your legislators need to hear from you that it’s important they demonstrate support!!

Take action!

  1. Check if your legislators have signed onto the letter
  2. If not, send your legislators a message asking them to sign on – either by emailing them or calling them.

Email

Dear _________

I am alarmed to hear that, in the final days of the legislative session, a comprehensive climate bill is still not on the governor’s desk. We have very little time before the end of the session.

[why passing a climate and justice bill is important to you]

We must get a climate bill to the governor’s desk by Thursday. Please join me in voicing your support for swift passage by signing on to this public “Dear Colleague” letter.

Thank you,

Call

I’m calling to voice concern that the legislature has still not passed a climate bill this session. Climate advocates are circulating a public sign-on letter for legislators in support of quickly moving a bill. Has the Representative/Senator seen the letter? You can view the form and the letter at bit.ly/maclimate22. Will the Representative/Senator sign on?

If yes: Wonderful, thank you. They can use the sign-on form found in the letter

If not sure/need to get back to you: Please let me know what the legislator says.

If no: Can you explain why not?

Two More Asks from Our Allies

Take Action: How to Make the MA House’s Economic Development Bill More Equitable

Yesterday, the Massachusetts Legislature released their economic development bill, a mix of investments and tax reforms. While there are many parts of the bill that are welcome and overdue, the Legislature misses the mark on others.

No Excuse for Excluding Those Most in Need from Rebates

The economic development bill includes a provision to send one-time taxpayer rebates of $250 (or $500 for married couples) to individuals who reported between $38,000 and $100,000 in income (or up to $150,000 for joint filers) in 2021 as a way of blunting the impact of inflation on households.

But what about those with less than $38,000? Speaker Mariano argued that such individuals already received support through essential worker bonuses earlier this year, but if anyone could benefit from additional money right now in our increasingly unaffordable state, it is those who have the least.

Rep. Tami Gouveia’s Amendment #813 would eliminate this income floor.

Regressive Tax Cuts

All in all, the bill spends $523.5 million through tax policy changes. $207 million of that (almost 40%) will go to more affluent residents—an estimated 2,500 taxpayers.

That’s because of a change to the estate tax in the bill. Currently, the estate tax kicks in for estates valued $1 million or more (with a graduated rate above that), with a “cliff” effect leading to the whole value of the estate being taxed after that $1 million.

Cliffs can be bad policy designs, but what’s even worse is cuts to vital programs and services that would result from lost revenue. The Legislature could have chosen clear, readily available ways to fix this without costing so much money but chose not to.

Rep. Erika Uyterhoeven’s Amendment #621 would eliminate the estate tax language entirely and send the House back to the drawing board for a better proposal and Amendment #630 would would eliminate the cliff effect while preserving the progressive nature of the estate tax.

A Whiff on Housing Policy

In last year’s economic development bill, the Legislature included important zoning reforms and tenant protections. The economic development bill is one of the last chances for the Legislature to continue that work, and they missed that opportunity — a stunning decision as this state becomes increasingly unaffordable.

Rep. Mike Connolly filed several amendments to address this gap in the bill:

  • Amendment #26: Increase rental deduction to $5,000, which increases the rental deductions from $4,000 to $5,000.
  • Amendment #113: Simple-majority approval standard for inclusionary zoning ordinances, which would enable municipalities to approve inclusionary zoning ordinances by simple majority vote
  • Amendment #176: Local Option Real Estate Transfer Fee for Housing Affordability, which would enable municipalities to pass locally appropriate transfer fees on high-end real estate transactions to create dedicated funds for affordable housing

Can you contact your state rep in support of these amendments?