In recent decades, state and local tax rates in Massachusetts have fallen by more than in any other state except for Arizona and Arkansas. Across the board, tax rates have been slashed. Starting in the 1990s, tax rates on income, dividends, and capital gains were steeply reduced. In 2008, legislators agreed to reduce corporate income tax rates. Today, those with the highest income contribute the least, with the poorest 20% contributing nearly 50% more of their income to the state budget than the top 1%.
The Massachusetts General Laws mandate that the annual budget must be balanced. Using this fact as a wedge, state legislators tend to underfund public priorities before raising taxes. Raising revenue must be our first instinct in MA, particularly during the COVID-19 pandemic, which has disproportionately harmed communities of color and lower-income families.
Economic injustice stems from bad government policy, not intractable market forces or economic cycles. A system of progressive taxation, in which the wealthy pay higher taxes than working families, is the most powerful tool available for building and maintaining a just economy.
Amends the requirement in the Massachusetts Constitution that income must be taxed at a flat, uniform rate for all earners
Levies an incremental tax of 4% on income in excess of one million dollars
Mandates that any revenue raised from the Fair Share Amendment is spent on public education, affordable public universities, and transportation infrastructure
Raises the tax rate on interest, dividends, and long-term capital gains from 5.0% to 8.95%
Removes the step-up in basis used to calculate capital gains tax on inherited assets
Increases the minimum corporate excise tax above the fixed baseline of $456, which has remained unchanged for decades
Closes a widely abused tax loophole that enables corporate profit offshoring and tax evasion
Raises as much as $400 million in revenue by taxing Global Intangible Low-Taxed Income (“GILTI”)
Applies only to large, multinational corporations that misleadingly claim that profits are earned in offshore tax shelters
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The dominant economic trend in recent decades is escalating inequality, underpinned by steep tax cuts and declining rates of economic growth. Our economy is not working. When an economy is rigged in favor of the wealthy, the large salaries captured by certain workers vastly surpass their contribution to society, starving the economy of capital and cutting-out entire groups of workers. Progressive taxation prevents wealth and income disparities from making economies dysfunctional.
Low tax regimes, not progressive ones, destroy jobs and stifle innovation. The median family wealth of communities of color in the Greater Boston area is effectively $0. No person can claim self-determination, let alone afford to start a business, when basic resources are kept out of reach. Public investment in high-quality education, sustainable infrastructure, housing, and healthcare all require raising tax revenue and a system of progressive taxation is the most efficient and fair way to do so.
Corporations consider a long list of factors when deciding where to locate operations, including quality of life for employees, the skill base of the labor force, public infrastructure, the health of the local economy, and access to financing. The general consensus is that tax incentives, whether tax credits or tax cuts, play a measurable, yet modest role in a corporation’s decision to invest in any particular state.
Massachusetts is a highly desirable state for business investment as a result of public investment. According to the Best States for Business list published by Forbes Magazine, Massachusetts ranks 4th for quality of life and 5th for labor supply. Further, only eight states have a lower total effective business tax rate. We must not fall prey to misleading capital strikes by corporations when they threaten to undermine the public budget.