March 27, 2024
Time to Address Health Costs and System Challenges
By Brooke Thomson President & CEO AIM member employers are painfully aware of the rising cost of providing…
Read MoreIs the Massachusetts Tax Fairness Commission an oxymoron?
It’s difficult to conclude otherwise about a commission that appears to view fairness exclusively through the lens of redistributing revenue from the productive sectors of the economy to the government. When the primary conversation about tax fairness starts with “How progressive is the tax?” you know the analysis is fraught with bias and ready to veer from math towards politics.
Put another way, commission debates seem to reflect the classic aphorism that a fair tax is one I don’t have to pay.
The Tax Fairness Commission has a broad charge to “review and evaluate the equity of historical tax rates and methods in relation to the changing income and wealth of residents of the commonwealth since 1990.” The panel has already voted on guiding principles, discussed the definitions of a “fair tax” and “adequate” tax revenues, and digested tax data. Those conversations will become the body of a report due by March 1, 2014.
The ideas put forward by the commission so far range from a graduated income tax, which has been rejected on multiple occasions by Massachusetts voters, to increasing tax rates and the personal exemption, to extending the sales tax to all business services and creating a “Household Income Tax Credit” available to taxpayers below a certain income who file a return.
The commission plans to discuss “remedies” to the tax system at its next meeting tomorrow at 1:30 pm in the Comptroller’s Office, One Ashburton Place, Ninth Floor. The meeting notice is instructive: “The Tax Fairness Commission is charged with making recommendations for how to make the commonwealth’s tax system fairer. The commission, thus far, has identified areas in the tax system that add to its overall regressivity.”
Employers fear that good intentioned but misguided tax prescriptions will sicken an economy already weakened with an unemployment rate that surged from 6.4 to 7.2 percent between April and October. Jobs and economic opportunity, after all, occupy the center of the tax debate because only a vibrant, private-sector economy creates opportunity that binds the social, governmental, and economic foundations of the commonwealth.
AIM stands for jobs, fiscal predictability, business formation, innovation, education and a government that acknowledges that the private sector has the unique ability and responsibility to create the common wealth for the people of Massachusetts. The creation of a job and a person’s ability to do it weaves together every important aspect of social and economic stability ” the desire for a better life, the ability to support a family, the confidence to start a business, and the need to support efficient government management of services such as education, health care, and public safety.
But the Tax Fairness Commission’s definition of equity threatens to upend the delicate balance of person, employer and job and ultimately push job opportunities to other locations – or eliminated them altogether.
A flat world economy where capital is increasingly mobile leaves no room for miscalculation. Excessive “Massachusetts-only” regulations and costs of doing business are unsustainable and put jobs at risk. And when the job is gone, the economic hope of the person and the prospect of economic security for his or her family go with it.
That’s tax fairness.
Here is an initial list of “remedies” compiled thus far by the commission:
Income Taxes
Sales & Excise Taxes
Property Taxes
Administrative Changes
Other Taxes Impacting Individuals