Even if there is not a focused effort from the Patrick administration – which would be disappointing – activists and supporters can take matters into their own hands. One example of this is the packet of information that Michael Forbes Wilcox disseminated about a week ago. This packet included sample letters to the Governor, to legislators, and to business leaders. If you have not already contacted your member of the House on this matter, please take the opportunity some time in the next week to do so. The letters in Michael’s packet might be useful in this regard.
The Governor’s proposal would close seven loopholes that would bring in from $250 million to $300 million. The loopholes that would be closed include –
– corporations shifting income to out-of-state subsidiaries to avoid Massachusetts tax,
– businesses claiming to be corporations for federal but not Massachusetts tax purposes,
– insurance companies paying taxes only on premium income and not on non-insurance revenues,
– companies avoiding deeds excise by not selling property directly, but rather placing the property with a subsidiary that will be sold,
– internet retail agents avoiding room occupancy taxes on lodging sold through the Internet,
– businesses avoiding sales tax on equipment by leasing from a subsidiary rather than purchasing directly, and
– non-residents taking advantage of the state earned income credit.
Governor Patrick’s proposals are fiscally responsible and they make the Massachusetts tax code fairer. The Governor also needs a victory of this magnitude if he is to be truly effective over the next two – and possibly four – years. The rubber is about to hit the road.
and as I expected, based on many past experiences, when my husband and I each made polite calls WEEKS AGO to our Rep Jeffrey Sanchez, and to our Senator Dianne Wilkerson (spare me the diatribes about her, we voted for Sonia Chang Diaz) askign them to storngly support closing the corporate tax loopholes and please get back to us with what their position was, NOT A PEEP.
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How are citizens supposed to think that we make any difference at all when being totally ignored is an option that legislators regulary take? Add this to the outcome of the citizens health care amendment, and the campaign finance reform law campaign that I volunteered on, and it’s a perfect mix for apathy and non-involement on the grand scale.
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But I’ll try to use the sample letter and send it to DiMasi as well as Sanchez; should it go to the House Ways and Means Chair too? (who’s that?). Thanks for this info, David, and MW.
because the house speaker said so.
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The threat of a gubanatorial is what—ajoke. A symbol?
Rep. Di Masi is the boss, the keeper of the gate. DiMasi calle the shots. The house works for DiMasi, not for Gv Patrick and not for you. Four months before re election the solons go to the public and lie through their teeth and the electorate buys it. That’s how you can explain Sen Wilkerson, although I can’t belive to this day her worthy opponent lost. As Alexander hamilton noted, “The public be damned!” Until we have a two party state and an opposition party that holds the legislative leaders to account, you are simply wasting your breath. We have politicians in this state who don’t even bother to campaign at re election, or even file as in the case of Ms. Wilkerson, because they know that the electorate will pull the lever for “D” no matter who’s name precedes it.
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Sad state of affairs.
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Your good intentions are commendable.
That quote is attributed to a Vanderbilt, not a Hamilton.
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And it is possible to achieve change in a one-party state. Bill Clinton did it in Arkansas, where the legislature can overturn a veto with a bare majority vote and increasing income taxes requires a 75% supermajority.
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It’s tough, but difficulty is not a reason to give up.
According to the Massachusetts High Tech Council, (former?)Revenue Commissioner Alan LeBovidge has said that.
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That sounds less like a loophole and more like a gaping hole (thanks gary!). That being said, I imagine a lot of those corporations are small businesses that aren’t making a lot of money, but that is just a guess.
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The interesting thing to me is the Legislature’s seeming enthusasim for closing loopholes during the Romney adminstration (around 300 million per year) Are they saying enough is enough or we need to wait a while until we do it again or no more.
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This is tough issue (at least for me). Mass corporate tax rates are high and via loophole closing corporations in MA are paying more and more each year. The cost of doing business in MA is high (salary, rent etc) but we have a lot of highly educated people (we deserve the extra pay!).
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At the end of the day my gut says we should hold off on closing the loopholes and take a real look at our rate and the accompaning complexity of the code.
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How about a win/win. We cut the rate and tighten the loopholes. Then the only ones making less money are the lawyers!
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Because that would take leadership and would involve political risk. Nothing would make more sense than eliminating all the various exemptions and simplifying the corporate tax system.
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I’d even endorse ‘combined reporting’ (the largest of the “loopholes”) if it came with a simplification and corporate tax reform. But no, the Governor’s scheme is to reach for the easy money–a few key tax changes–and frame those change as closing “corporate loopholes”.
The state has a $1 billion budget gap. Closing these loopholes (without cutting rates) was supposed to close $300 million of it. If you don’t want to raise revenue here, then please enumerate a combination of (a) revenue increases and (b) spending cuts that has the same net budget impact.
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If you can’t (or won’t), then I think it is understandable why this sort of proposal isn’t being taken seriously.
First, the Romney 9C cuts were legitimate. That’s $300 million in savings, had Patrick not reversed the decision. I know, I know, people are hurting, towns are bleeding, insert favorite hyperbole here, use the word “slash” a lot. Close a firehouse.
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Second, Governor Patrick introduced ‘new’ spending of $148 million in his budget. Un-introduce it.
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Third, address the cause of the gap: mandate GIC membership unless the town’s local costs are less. I don’t know what the savings would be; statutorily limit collectively bargained health care to less than 70% match….I’m sure there’s other good thinking in regards to cost savings in entitlements.
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Forth, the hard part. If the Administration shows a willingness to level fund, it’s politically fair to seek additional broadbase individual tax: gas tax or income tax to close the gap. Corporate tax is a joke, an expensive private-sector nuisance, a hotch-podge of exemptions and credits, and in the end, a hindrance to growth. Closing ‘loopholes’ is just a lie to sell the tax increase.
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That’s a pretty big assumption. The 9C cuts were retroactive. Like your employer giving you a bonus early in the year, and then telling you that he’s yanking it back halfway after the year has ended, and docking your pay the second half of the year to make up for it.
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The 9C cuts are only legitimate if the FY07 budget has to dip into reserves when all is said and done. We won’t know that until July or so, but someone posted here that revenues are still higher than projected, and therefore we will still end the year in the black.
Which were discussed and debated during the campaign. And his victory was a clear sign of public support for those priorities. And from what I can tell, he’s already scaled back his plans significantly in response to the budget situation. And, I believe, his action on Romney’s 9C cuts also reflects those priorities (as well as trying to control the budgetary whipsawing that NoPolitician mentioned – and making government run more smoothly and efficiently is also a useful and important goal).
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You may not agree with those priorities, but it is unreasonable to expect Governor Patrick give up the issues he campaigned and was elected on. And, to me, pursuing new revenues because you have priorities that require new spending is both appropriate and politically responsible (and is a refreshing change from many recent politicians).
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You also suggest pursuing a broad-based individual tax. I can understand the argument that the corporate tax is economically inefficient. But I’d suggest that pursuing broad-based individual tax increases is politically impractical. Consider all of the flak Patrick took during the campaign for not supporting the tax rollback. And note that the debate was about a tax cut versus the status quo – not about a tax increase versus a tax cut.
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As for your health care proposals… I certainly agree that there can be savings by expanding membership in the GIC and that is an avenue to explore. But mandating a limit to the employer contribution? And, effectively, rewriting hundreds of freely negotiated contracts by state fiat? I think there’s something seriously wrong with that. Put another way – if it is such a good idea, why not impose the same requirements on private employers as well?
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Not existing. Perspective. All future collectively bargained agreements.