Home
About Me
Preaching
Gardening
Exploring Islam
Our Country's Finances
Scientific Editing
Ten Percent
Resume
Contact Me

Raise Our Taxes! – Testimony before the Massachusetts Legislature’s Joint Committee on Revenue

In May 2011 I had a chance to ask the Massachusetts legislature to raise my taxes.

To give some background … State and local taxes are regressive in Massachusetts. In other words, lower-income people pay more taxes, as a percentage of their income, than higher-income people. This does not make Massachusetts unusual – state and local taxes are regressive in all states, and more so in most of them. But it still seems unfair to me and to many other people.

In 2011, Senator Sonia Chang-Diaz and Rep. Jim O’Day sponsored “An Act to Invest in Our Communities,” which would raise the income tax rate from 5.3% to 5.95% while nearly doubling the personal exemption, and also increase the tax rate on investment income. This bill would bring in more income for the state, give a small tax cut to people earning under about $70K, and raise taxes noticeably on people earning more than about $100K. (more details) The resulting tax system would still be regressive, but less so.

My household would pay more under this Act, but I support it both because I believe regressive tax systems are unfair and because I think the state needs more revenues to keep from laying off more teachers and other state and town employees.

I was delighted to be able to testify before the Joint Committee on Revenue and ask them to raise my taxes. I was part of a panel of three higher-income people who explained why we support higher taxes on people like us. Our testimony is here:

I am currently, alas, under the impression that such a bill is unlikely to pass. Rep. Jay Kaufmann is a Co-Chair of the Joint Committee on Revenue, and very much in favor of progressive taxation, but he believes this sort of bill is unlikely to pass constitutional muster with the state courts.

The issue is that the state constitution specifically does not allow a graduated income tax. The same tax rates must apply, it specifies, to all Massachusetts residents.

The courts have, however, decided to allow personal exemptions, so that no one pays income tax on the first bit of money they make – $4,400 for a single person in 2011. This provision makes our income tax a little progressive.

But the courts have also, Jay Kaufmann explains, indicated that there is a limit to how large an income tax exemption they would consider constitutional. They have not, as I understand it, specified what that limit might be. But they have indicated discomfort with an income tax that intends to be progressive. And so Jay is unsure whether such a bill, whatever its details, could survive review by the courts.

In other words, our state constitution requires regressive taxes. The only way to have a progressive tax system would be a constitutional amendment.

An incremental step (i.e., less regressive) would be to increase reliance on the state income tax while decreasing sales and property taxes. The huge problem with this approach is that income tax receipts vary widely depending on the health of the economy. When the economy is doing well, we collect a lot of income taxes. When the economy is hurting, income tax receipts plummet. Unless we practice exceptional self-restraint in saving money from good times to bad, relying on the income tax means the state has to cut its spending whenever the economy gets bad – exactly when it is most painful to cut public services and lay off public employees.

So I still support this bill, but mostly as a token of the direction I’d like us to go. Does anyone have the energy to lead a successful movement to amend the state constitution? We’ll see.


Back to Our Country’s Finances

Or other topics that might be of interest …