We still don’t know how bad the financial costs of the COVID-19 recession will be for Massachusetts, but right now, things don’t look good. The Senate Ways & Means Chair, Sen. Michael Rodrigues, recently stated that he thought the state was looking at a $5 billion drop in revenue. That’s about 10% the size of the whole statewide budget.
Massachusetts currently has one of the highest unemployment rates in the nation, and as we approach a second wave of the pandemic, it’s clear that we need to find a way to make up the difference and fund our public services. We need to reject austerity and make sure that the public programs Massachusetts residents need aren’t left behind.
The Legislature has had plenty of time to bridge the gap and make sure that we have the revenue necessary to adequately fund the public services Massachusetts needs. The solution was clear before the pandemic, and now it’s even more clear: we have to make sure that the wealthy and that corporations in Massachusetts are paying their fair share.
There are a number of options the Legislature has to make that happen. They can raise the personal income tax rate (while increasing the personal exemption amount to ensure low and middle-income people don’t pay more in taxes). They can close loopholes that the wealthy often exploit to avoid paying taxes. They can close corporate tax loopholes and raise taxes on the dozens of corporations who make a profit in the state. They can tax large college endowments, which have become massive sources of concentrated wealth with currently little to no public accountability. In Massachusetts, there are about a dozen colleges and universities with an endowment of at least a billion dollars. Taxing these endowments their fair share could result in almost $1 billion in annual revenue!
When this session began in 2019, we heard a lot of “talk” from legislative leaders about how they were going to seriously look at raising new revenue. There was some “talk” about raising capital gains taxes on unearned income, but nothing came of it. The House passed a modest increase to the corporate minimum tax, but that was blocked by the Senate. We seem to be ending this session without any serious attempt to raise progressive revenue. That’s not ok!
We need a nationwide wealth tax to eliminate income inequality and create a government that works for all, not just the 1%. But while we wait for the federal government to do something, in Massachusetts we can raise the estate tax and strengthen the capital gains tax. People who inherit large amounts of money or earn unearned income like capital gains need to be paying appropriate taxes.
We need to pass the Fair Share Amendment, which would tax Massachusetts residents with incomes over $1 million. The Fair Share Amendment already passed out of the Legislature this session, but as with every amendment to the state Constitution, would have to pass a second time in order to get on the ballot in 2022. This requires popular pressure and work to make sure it passes at the polls and is enshrined into law.
Politicians try to avoid talking about taxes whenever they can, but the alternative to making corporations and the wealthy pay their fair share is cutting important programs that fund our schools, our healthcare system, supports for low income people, and critical investments in transportation infrastructure. That’s not a trade-off we can afford to make, and it’s going to take concerned supporters like you that are willing to let your wishes known.
We know we can win these crucial reforms because we’ve done it before. In 2019, the Legislature blocked a corporate tax break of $37 million because activists like you made their voices heard. Reps statewide campaign on platforms that claim to put people before profit, but it’s up to us to make sure they deliver on their promises.
** If you’re interested in learning more about the tax proposals mentioned in this article, check out this detailed report from Mass Budget & Policy Center: 14 Options for raising Progressive Revenue.**