Thank you to everyone for their efforts on this issue. The revenue raised from closing these loopholes will help increase local aid and avoid the budget cuts that could really devastate health and human services, and many other budget areas.
I wanted to update everyone on what some House members are doing to support closing these loopholes. The House session just ended for the day, but there were lots of conversations today about supporting Governor Patrick’s proposal.
Carl Sciortino and I spent a lot of time today talking to colleagues. We are drafting a letter to show that there is support for doing this amongst State Representatives, and that the proposal deserves a fair hearing before the Joint Committee on Revenue.
In addition, we are in direct communication with the advocacy groups like Neighbor to Neighbor on supporting this effort, and emphasizing the need for these revenues to avoid devastating budget cuts.
Finally, this morning at the N. Central Mass Health and Human Services breakfast in Fitchburg, I encouraged all attending service providers to express their support for closing corporate tax loopholes, to help achieve their agenda.
As legislators we are hoping to meet first thing next week to further discuss this critical legislation, and express our support for Governor Patrick’s proposal. Thanks again to everyone on their own efforts and hard work.
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I just got home from campaigning, and wanted to add a few comments on how voters and activists can best make a difference in this fight.
In my opinion, we need to communicate that one of the main reasons that Deval Patrick was elected governor in Massachusetts this past year is that Massachusetts voters expect more from their government. The bar has been raised.
Unless new sources of revenue are found this year, funding for human services, environmental protection and state parks, public education, and affordable housing will remain flat or even be cut. Maintaining the status quo will only burden more Massachusetts residents, whether through cuts in services, or rising property taxes.
I am not aware of any other plan in the Legislature that will succeed in addressing the state’s fiscal challenge so quickly as Governor Patrick’s proposal to close corporate tax loopholes. As Democrats, we need to share a progressive vision of everyone paying an equal burden of taxes to maintain core essential services, including the business community.
Okay, off to the races!
centralmaguy says
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The ideal that all facets of society pay their fair share to promote the common good seems to have been forgotten, at least insofar as our tax codes go. We have seen corporate profits skyrocket in many sectors, as have the salaries of many CEO’s, yet many corporate leaders and their political allies bemoan the costs of doing business going up.
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Reality check. Residential taxpayers have been picking up the slack locally for low federal, state, and even local corporate tax rates. Regular people pay out more of their earnings in income taxes in order to subsidize the operations of large corporations. Something’s gotta give.
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It is time for big business to pay their fair share, to help ease the burden on residential taxes, personal income taxes, and small businesses.
centralmaguy says
According to the IRS, individual income taxes accounted for 44% of net collections while corporate taxes accounted for only 15%. Neither figure takes into consideration FICA taxes paid by employers, employees, and the self-employed into the Social Security and Medicare trust funds.
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According to MA DOR, in 2005, DOR collected $9,690,270,000 in personal income taxes and only $1,705,618,000 in corporate taxes. This is without taking into consideration local property taxes, excise taxes, etc, paid by individuals.
stomv says
Corporations play states against each other for lower state (and local) tax burden, and then work Washington for lower national taxes. Workers pay more, shareholders less.
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How can the game be changed so that business and personal incentives are balanced?
gary says
Eliminate them completely.
peter-porcupine says
I understand the idea, and even agree with Cato philosophically. However – my first concern is Massachusetts, and with NO tax incentives, businesses would have nothing to look at but cost of living, housing, utilities, net infrastructure, insurance costs, etc. Mass. cannot compete in ANY of those areas! We have college age kids, a quasi renewable resource, but one which can be purchased almost anywhere – offer them a job in Texas, and if the money is right, see how fast they go!
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Without incentives, we are cooked as an economy, unless we become some Palm-Island like elderly Disneyland, with undocumented workers in extended care facilites, with the good paying jobs being the ones where you dress up at Plimouth Plantation and churn butter for the crowds.
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We have colleges, quaintness and oceanfront without tax incnetives. Eeeeessshhhhhh….
stomv says
used to be called Gateway 2000. They started in Iowa, then moved to South Dakota, then finally California. Why’d they move to South Dakota? Chasing all those things you list… mostly lower costs. Then they moved to California. Why? It turned out that it’s really hard to recruit people to live in South Dakota, even if you pay them lots of money.
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Massachusetts is far more like California than like South Dakota. Yet, we don’t see a mass exodus out of California. Why do you suppose this is, in light of California’s massive cost of living, housing costs, etc.?
raj says
…I thought Gateway was almost out of business…
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You’re correct about the difficulty of attracting people to SD. It was probably difficult for them to attract people to Iowa, too. But with multi-national high-tech companies, it may have been doubtful that they had many high-tech employees in either state.
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Example. Company X in the US designs a high-tech (electronic) product. It does so using chip design tools for a chip foundry (company Y) in Singapore. The boards and housing will be fabricated in Taiwan (companies Z and Z’). The product will be assembled in the Philippines. Products will be distributed throughout the world, and any profits will be re-patriated to Company X in the US.
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The designers don’t have to be in Iowa or SD to get their work done, and probably don’t want to be.
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Read some of Richard Florida’s works on the issue.
stomv says
but you oversimplify.
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Gateway didn’t do much design at all. They discovered a set of suppliers who could get them sufficiently cheap, high quality electronics that interoperated well and that Gateway could put together easily. The components were produced in Asia, but final assembly was in tUSA. Skilled assembly? Meh.
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As for the design, there’s a lot of work that gets done more easily when people are just down the hall. Collaboration via electronics — especially 10 years ago, but even today — isn’t as effective as being able to put 8 engineers in a room, hand them a white board and some colored pens, and locking them in until they’ve got a proposal.
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It was precisely because the designers didn’t want to be in IA or SD that led to Gateway moving to California. Prior to that, (nearly) all of their high-tech employees were in IA, and then in SD.
raj says
…I’ve been involved in engineers’ brainstorming sessions.
center-aisle says
personally . Gateway ( originaly called Gateway 2000) was located on the Iowa/ So Dakota border( actually in Iowa)before the Company got really huge. The State of Iowa tried to play “tax hardball” with Ted. Ted tried to “make a deal” for more reasonable conditions. After a flat “No” Ted said “Screw you!” and moved his manufacturing plant onto So Dakota soil ( which was actually only just a few miles away). The rest is history….. moral of the story? Greedy Iowa got “screwed” out of millions…sound familiar?
stomv says
Maybe not so much.
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1. He only moved down the road apiece. The employees probably didn’t move for the most part — so the biggest share of taxes (state income taxes from employees) didn’t change much.
2. He didn’t stay long, bolting for California a few years later.
3. By not giving Gateway a deal, they didn’t open the door for every other Iowa company to come to the state house and threaten to leave if they don’t get their own little tax cut.
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Is Iowa greedy for asking that companies pay their fair share, instead of just relying on wage earners for the tax base? I don’t think so.
center-aisle says
How’s your favorite newspaper , the Glob” doing now that they are cutting Mass jobs and outsourcing to India?
stomv says
1. It isn’t spin.
2. The “glob” isn’t my favorite newspaper.
3. That they’re curring Mass jobs and outsourcing to India is representative of the entire American news industries woes — losing classified ads has really clobbered them.
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center aisle my foot.
charley-on-the-mta says
Huh. Funny, since it’s you who changed the subject.
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Say, aren’t you Ronco?
center-aisle says
ronco? whatever.. What I am concerned about is “Shadup”? Is this how posters respectfully respond to opposing views? This is acceptable? Thanks for the clarification.
raj says
…I presume that by “Ronco” and “spin” he was referring to Ron Popeil, who became famous by doing advertisements for his spin casting fishing rods. Popeil’s company was named Ronco.
hrs-kevin says
All newspapers are doing badly these days, but that is because of technological change not state taxes, so I don’t understand what your point is.
amberpaw says
Maybe it mostly doesn’t SNOW in California.
heartlanddem says
Nice to see some leadership Jamie. It will be good to see you bring it to the next level.
hopefuldem says
Who filed this legislation and who has signed on?