Blue Mass Group

Reality-based commentary on politics.

Massachusetts Has Low Business Taxes

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The non-partisan Massachusetts Budget and Policy Center (MBPC) today released a new Facts at a Glance fact sheet: Business Taxes in Massachusetts: How Our State Compares to the Nation.

The summary concludes that Massachusetts has a significantly lower level of business taxation that most states; in fact, these studies indicate that by four different measures, Massachusetts ranked among the eight states with the lowest business taxes.

Now all we need to do is figure out how to do something about housing prices.

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  1. …I would recommend the Pioneer Institute White Paper #25 – “Measuring Up?  The Cost of Doing Business in Mass.” published Oct. of 2006.

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    the most surprising finding was that we were median in health care costs to employers.  There are several good industry-to-industry and state-to-state measurements to ponder as well.  Worth the read.

    • I’d like to add the MMA’s Revenue  sharing and the future of the Massachusetts economy

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      Short version is that the cost of living makes running a high-tech company more feasible in the North Carolina university axis or Austin than here, because you can pay your employees way less and still give them a comfortable living standard.

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      IMO when you add up all the employees on the payroll, this would tend to trump taxes in many cases.

  2. This is an interesting and valuable study, though it seems to me that the real reason MA’s “business climate” is ranked low in some other studies is not because of taxes (which really is not the critical issue for businesses), but because of unnecessary regulations.

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    Finding and eliminating “unnecessary regulations” is not the right-wing issue that it is sometimes made out to be. It’s actually quite pragmatic — such as making it much easier for small businesses to find what licenses/permits they need and pay for them in one place, or periodically reviewing regs to ensure that they are still necessary given different technology, etc.

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    So Peter Porcupine’s suggestion to check out the studies by the Pioneer Institute (center-right, but politically pragmatic rather than ideological) is defintely recommended.

    • between process re-engineering (good) and holding down consumers and employees so businesses can screw them over faster (bad). These days, too many companies seek the latter in the guise of the former.

  3. First is the health care initiative that is woefully underfunded creates a huge disincentive for businesses right now.

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    But the real issue is the unpredictability of Massachusetts.

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    Businesses look at the state and see that they can’t trust what will happen a couple years down the road.

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    Some may take the bait and accept a tax incentive to move in, but then later see the complaints that they got these incentives appear and they just move on.

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    Massachusetts has been bouncing back and forth between stable, fiscally responsible leaders and then liberal tax-and-spenders. It just gets too dangerous to come here without some long term commitment that you wont be attacked a few years down the road.

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    Any business will tell you that its much more important to have stability and predictability than it is to have a tax break.

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    I predict that within 10-15 years we’ll have 70-80% of our citizens in Mass working for the government in one fashion or another (either directly or as a direct vendor). I would predict that we’re already near 40-50%.

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    • 40-50%?  I would predict that if you used these series of tubes called the Internets to look stuff up, your numbers wouldn’t be so foolish

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      BLS data

    • I predict that within 10-15 years we’ll have 70-80% of our citizens in Mass working for the government in one fashion or another (either directly or as a direct vendor). I would predict that we’re already near 40-50%.

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      U.S. Department of Labor
      Bureau of Labor Statistics 
      Massachusetts
      State at a Glance

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      Civilian Labor Force  3,396,200
      Government  411,400

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      Percent:  12%

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      Massachusetts has been bouncing back and forth between stable, fiscally responsible leaders and then liberal tax-and-spenders.

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      Oh, really?

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      However, all six measures plummeted between FY1987 and FY1992, reversed only a fraction of their decline over the ensuing nine years, and plummeted again in FY2002. While these measures have risen since FY2002, all except business income tax share and corporate excise tax share are currently below their FY1992 levels. Among the series with data back through the late 1960s, all four are well below their values in FY1968, the year chosen by the MPBC as its benchmark. (Business income tax burden and share are below their FY1982 values.)

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      Welcome to the reality-based community, buster. You’re in for a bumpy ride.

        • ….that changes everything.  Of course over the next few years all those small businesses offering consumer products and services are going to refocus on providing the necessary widgets to run state govt.

          • with all necessary statistics. The Republitrolls zeroed it out.

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            You may be interested to know: Total state personal income is about $230 billion. Total state government budget is around $26 billion. Biggest city budget is $2 billion.

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            You can do the math. He obviously can’t.

            • Of which was that unstability is a main reason big business stays out and gets out of Massachusetts.

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              Just watch this business that is mentioned this morning in the Sun that is moving to Billerica (solar energy company).

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              They are only doing so because they are getting a subsidy on a loan from the state.

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              In a few years, someone will call that a “tax loophole” and go after it.. and then they will be gone.

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              Look at all the empty Raytheon plants in the area.. they moved most of thier work to Arizona.

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              And as to the labor force.. its a prediction.

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              I don’t exactly trust the bureau of statistics report until I study it.. but look around you.. the largest employer in every community in Massachusetts is the local town or city.

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              Then you have the state (including colleges, police forces, counties, prisons, libraries, authorities ..)

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              Then the military bases.

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              Then all the small companies who’s only existence is to feed the government (data storage, engineer & construction companies, research, advocacy and welfare groups, lobbying, assessors, inspectors, defense contractors)

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              All that is left is fast food, day care, restaurants and small retail to feed, clothe and shelter those workers who choose to stay for now.

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              There are no natural resources being used now to create new products.

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              The furniture industry is nearly gone, the toy industry, paper production is gone. textile (clothing) and most farming and other agriculture are gone.

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              We need to create a welcoming environment to bring in big business that gives people real, stable work.

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              Instead, any incentive to get someone to come here is crushed within a few years.

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              • that the business tax burden has been steadily decreasing for more than 30 years in Massachusetts, with very mild bumps that do not at all change the overall trend–downward. I gave you a quotation and a link. The rest is up to you.

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                What are you adding to this discussion, other than baseless opinions you are not used to having questioned when you b.s. among your buddies?

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                In fact, they’re not just baseless, they’re absurd. How is a government funded by a 5% sales tax, a 5% income tax, a median $3000 per owner property tax, a shrinking corporate contribution and a few other odds and ends supposed to be funding 50% of the employment in the state? It’s a laugh.

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                I suggest you educate yourself about the Massachusetts economy–ever heard of health care? universities? financial services?–before you pull any more opinions out of thin air.

              • The “loophole” thing is very, very specifically not targetting technology and research incentives.  Even the Sun story this morning had a quote to that effect.

  4. Great point Bob and one that Gov. Patrick should make more often.

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    Unfortunately, business taxes revenues make up less than 12% of the state’s budget. Personal income tax revenues are over 50%. So if you want to reduce the cost of doing business in Mass a reduction in income tax is more important. The state needs to find ways to reduce the tax burden and hence the cost of doing business and living here.
    http://www.beaconhill.org

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    Regarding the second issue you raise on housing prices as well as business environment is the issue of permitting. Massachusetts has one of the most cumbersome processes to gain building permit. We are on par with New Year City which is several times the population of our entire state. It is common for a new condo building to take over 3yrs to get permitting approval.

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    Patrick needs to find a way to streamline this process. It will lower the costs of building, as well as increase supply of housing.

  5. One thing I dont get:

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    On the one hand, we’re seeing a series of front page posts about how MA doesnt really tax that much, and how that is something to be proud of, and how it is upsetting and unfair to be labelled “Taxachusetts”.  OK, I’m not 100% sure this is right but most posts have been fairly well done and convincing so lets grant all that.

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    On the other hand, almost every initiative, solution, suggestion and philosophical argument around here pits blue BMG’ers squarely against the anti-tax folks.  More tax, more spending.  Tax business more.  Tax the rich.

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    Seems like a contradiction to me.  What gives?

    • who are trying to weasel out of their business tax responsibilities by crying a river about their unfair burden are lying.

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      Simple enough?

    • If MA really is low tax, then arguing to increase taxes in MA isn’t a contradiction.  It’s noticing an outlier and bringing it in line with the norm.

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      I am not arguing the if nor the then… just pointing out the connection (not contradiction).

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