Deval Patrick is going to address the corporate loophole problem by cutting corporate tax rates. What problem does that solve?
The one thing he started to do that we elected him for was to cut waste, fraud and abuse by closing corporate loopholes. (Remember waste, fraud and abuse, where we were going to get all the money we needed to do things we need, together we can, all that stuff?) A little push-back from the legislature and, oh, well, never mind (although I notice that he’s not abandoning his gambling plan as easily, despite legislators’ resistance). So the plan now is “revenue neutral.” He’s going to teach those weaseling corporations a lesson: weasel out of your taxes, and we’ll…well, we’ll just cut your tax rate, darn it.
Wasn’t the point of closing the loopholes to get the money these guys have been pilfering out of our public treasury? Quite a lesson for all the ordinary mortals who have had to take up the tax burden the corporations have managed to shed for the last fifty years.
And this, on top of the untallied millions (and why is no one tallying those millions?) of public dollars being given away in tax breaks, now featuring the life-sciences bonanza.
I remember candidate Patrick’s Globe interview of October 22, 2006, where he debunked the myth of tax breaks as a business decision-making factor. He told me the same personally at a fund-raiser. When he promised to “create” 100,000 jobs, I didn’t realize he was planning to create them by actually paying for them. I was thinking, better education, transportation infrastructure, housing, environmental quality — things that really do influence business decisions. But…we can’t afford those; we’re giving away our money to create jobs.
OK, I want to see a show of hands. How many of you Deval supporters feel duped? Come on, admit it. We read into him all our hopes and dreams, just as he led us to do; we were willfully blinded and misled. And now, we get the government we deserve. And we feel too sheepish (in both senses) to complain.
Would BMG be so silent if Healey were giving away our assets to developers and corporations, making the government a partner in a gambling empire that predominantly exploits the poor, absorbing the state highway department into a quasi-public transportation authority, shifting park responsibilities to private “points of light,” etc.?
A political one.
to put the blame where it belongs: Sal DiMasi.
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p>Patrick is accepting half-a-loaf, for sure. It doesn’t solve the revenue problems, and Patrick and DiMasi both are going to have to deal with that, immediately and decisively. It’s just going to have to happen.
Sal DiMasi is wrong on this, true. But I don’t see Patrick putting up the same fight on loopholes as he is on casinos. And the loopholes would have yielded more money, more certainly — and, importantly, it would have come from the people who actually should be paying it, not from the low-income people who lose most at gambling halls. There are implications of the state’s becoming an advocate and equity partner in gambling (or gaming, as he calls it playfully). We didn’t need to put aside a domestic-collapse-aide fund for corporations required to pay their lawful tax obligation.
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p>Looking at Patrick’s pattern over the year, it is clear that he is willing to broach the subject of business taxes, but unwilling to stand firm.
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p>Don’t let him off the hook like this. We worked hard to help him become governor. Don’t blame others if he fails to walk the walk. He’ll just get worse.
I feel zero “buyer’s remorse” about working so hard to get Deval elected. As anyone who follows Beacon Hill happenings can clearly see, it is the leadership in the house, specifically speaker DiMasi, who has stymied so much of Deval’s agenda thus far.
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p>Instead of being emotional and angry at Deval for not having powers that the state constitution doesn’t give him, if you’d like to see his agenda move forward I’d STRONGLY recomend that you get involved with upcoming state rep races, and work just as hard for progressive pick-ups there as you did for Deval. The four races the editors have up on the side bar are a good start, and once those are over, I recomend you check out Patrick McCabe (http://www.mccabeforrep.com) and Jason Lewis (http://www.electjasonlewis.com/), who are progressives challenging uber-conservative Democratic incumbent state reps Paul Donato and Paul Casey in Medford and Winchester, respectively.
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p>Here’s the truth: If you thought electing Deval would usher in a new day in MA, you were deluding yourself from day one. There are three co-equal power bases in MA politics: The gov, the senate and the house. We don’t have a progressive majority in the house yet, and until we do, big parts of our agenda will remain one big pipe dream.
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p>Note: In order to get our progressive agenda through the house, we don’t neccicarily have to replace scores of house members. Rep. Carl Sciortino’s primary victory in 2004 over super-conservative Dem than-rep Vinnie Ciampa is thought to have moved dozens of votes in the house for the gay marriage debate. The more we beat the bad guys, the more everyone else comes to us hat in hand, because all politicians love to be on the winning side.
let’s try that again
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p>http://www.mccabeforrep.com
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p>http://www.electjasonlewis.com
as well. I listened to every stump speech. I believed in his progressivism. His decision to request an increase in the number of H1B visas despite ample evidence of corporate abuse of the system to drive down wages, deny qualified Americans jobs and trample the civil rights of non-Americans has me questioning his sincerity.
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p>There is ample documentation of the abuses. An excellent summary was done by Dr. Norman Matloff of Univerisity of CA Davis (lengthy study in PDF format).
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p>There is currently bipartisan legislation sponsored by Grassley and Durbin designed to stop the abuses. Unlike the casino proposal which (giving the benefit of doubt) might have some potential economic benefit to the citizens of MA, an increase in the number of visas has ZERO potential benefit to anyone other than corporations. This is the bellwether issue of this administration.
I know plently of people (including relatives from England and friends of relatives) have benefited from H1B visas, the experiences of coming to work in New England for ski season or those who come to work on the Cape during the summer. I see no reason to deny the oppurtunity for seasonal work to foreign nationals, especially as local residents are more likely to want pernament year-round employment. Expanding visa access is a net positive for everyone.
that either, except that’s not relevant to the issue. If you are going to comment, at least take the time to read what the issue is about and have some knowledge before making an utterly ridiculous argument. I happen to like foreign nationals and hate the thought of them being abused by the very system that is abusing them. I’m neither anti-corporation, anti-immigrant or any other anti. I am for civil rights for all. That’s why it’s so alarming to see that a progressive whom I worked very hard for has bought into an identified fallacy perpetuated by corporate lobbyists. Sheesh.
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p>Boy, I feel so enlightened. You’ve added so much depth to the debate. /sarcasm
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p>Get past the knee jerk defense of the Governor. We all know he doesn’t have the power of a dictator. That doesn’t mean someone can’t be disappointed by the lack of strength he has shown. Where’s the bully pulpit? Where’s the state-wide tours to push his agenda?
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p>I was with a group of hard core dem Deval supporters last night. Part of the conversation was about disappointment in his performance so far. We wondered how he went from closing loopholes to lowering rates. (not property tax rates, ironically)
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p>I’ll make you a deal: you don’t say he’s perfect and I won’t say he’s perfectly awful. You don’t say we don’t understand how the State House works and I won’t say you’re a pompous ass that sounds like he might like voting returned only to “worthy, educated property owners.”
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p>He’s not in the middle of a re-election campaign, which is good. He has the time to listen and adjust what he does.
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p>I agree everyone needs to jawbone or replace their senators and reps. But I think Deval needs to stand a bit firmer on the agenda and show a little leadership. Frankly, I think the Republicans wore out the “blame it on legislative leaders” tune.
It will take some more time for people on this board to overcome their cognitive dissonance.
Is the proposal going to be revenue neutral? My understanding was that the idea was to still have some positive net revenue increase…
I was under the impression that the closing of the loopholes was an issue of “fairness” and NOT a tax hike.
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p>So if the loopholes are closed, but in a revenue neutral way, it isn’t worth doing?
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p>Might as well have admitted that it was a tax hike right from the getgo. Would have saved a lot of hairsplitting arguments with gary.
Revenue-neutrality is not the same as fairness. Loopholes are ways to weasel out of taxes in ways that the law-makers didn’t think to prohibit; it’s almost impossible to write a law that can’t be gamed. But the intent of the law was not to allow these evasions; the intent was to tax at the full level. The budget is based on the expectation of full payment.
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p>So closing loopholes in a revenue-neutral way is a contradiction in terms. It’s not worth doing, because they’ll just get a legalized tax cut, and go on to find other loopholes, and then cry poor again if those are threatened.
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p>Could working families get away with something like this? No.
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p>Where is all Patrick’s promised property tax relief? After a feeble effort at a two-year commercial rate freeze, which he gave up without a peep, all he’s really pushing is adding local taxes. This is euphemistically called “reducing reliance on the property tax.” Yes, it reduces the percent of your total tax burden paid as property tax, but only by piling on other taxes.
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p>If Patrick had admitted up front all his real intentions, he wouldn’t have been elected.
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p>I can’t believe after that spiritual experience we all shared with his ascent to high office to help humanity, this is what we’ve gotten. This is what was supposed to bring people back to the voting booth, to check back in to democracy, together we can….the triumph of hope over experience.
Combined Reporting does not close loopholes. The current MA corporate excise tax taxes separate entities that have nexus in MA. Separate entity taxation allows a corporation to carve up its operations and isolate anything that does not create corporate nexus (intangible holding companies, cash managers, REITs, etc.) in a separate entity outside MA. Combined Reporting is a different system that treats the entire corporation as the taxpayer and apportions its income in a combined report. Changing to combined reporting will cause multi-state corporations that isolate non-nexus creating activities in separate corpoations to pay tax on their entire income at a lower rate. It will also allow corporations that exist entirely in MA to continue to pay tax on their entire income, but will decrease the rate.
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p>Combined Reporting and a decrease in the corporate excise tax rate is a fair and proper step to take that will give a break to MA corporations and get more income from multi-state corporations by preventing them from carving up their businesses and isolating non-nexus creating activities outside of MA.
I am sufficiently concerned about the short- and long-term employment picture in Massachusetts and nationwide that I would support a corporate tax rate reduction if the Legislature would agree to pass a “revenue neutral” version of Gov. Patrick’s plan to close the state corporate tax loopholes estimated at $400 million.
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p>While the Massachusetts employment picture remains relatively healthy compared with some of our regional neighbors, I am concerned that national recessionary winds are blowing East. Massachusetts, already under economic strain caused by the real estate slump and high energy and labor costs, remains ill-prepared to weather a prolonged recession because most of it middle-class jobs are concentrated in too few sectors (health care, education, and technology). Moreover, the state suffers from an aging manufacturing base that hemorrhages thousands of jobs each year. A state corporate tax reduction could reduce the adverse employment impact of a increasingly likely recession in Massachusetts and attract some desperately needed new businesses and jobs to the state.
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p>I also believe that the Gov. Patrick should take this opportunity to wrest the political initiative away from Speaker DiMasi whose approach to the state’s long-term structural fiscal deficit has been wholly irresponsible. If the Speaker continues to refuse to negotiate with Gov. Patrick in good-faith on this critical fiscal issue, the the Governor should not hesitate to mobilize the Deval Patrick.com grassroots organization, work with his Senate allies, and the progressive caucus in the House, to push through a corporate tax reduction/closure of corporate tax loophole plan that is fiscally prudent, politically equitable, and “revenue neutral.”
The point is that tax breaks don’t attract businesses. Mass. is already down at an average business tax burden, despite all the corporate whining. Businesses don’t make location decisions based on taxes. Read Greg LeRoy’s book, “The Great American Jobs Scam.” The corporations will take what they can shake us down for, but that’s not how they decide where to go or when to expand.
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p>So all this loss of tax revenue simply starves the public services that actually are factors in business decision making. The top factor is known to be a qualified local workforce.
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p>I contend that all this corporate tax-cutting and government subsidizing is backfiring, and leaving us with towns and cities that corporations won’t want to be in, because we aren’t educating our children, we aren’t investing in good public transportation, in parks and environmental quality, and we aren’t building enough housing that’s affordable for employees.
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p>The state loophole hearing featured testimony from many business people and economists, and they all said the same thing. In fact, they pointed out that these loopholes give unfair advantages to out-of-state corporations, and directly hurt local business.
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p>So if the grassroots organize, full taxation of corporations, to support needed public investment, is what they should demand. And this is what Deval Patrick was promising when he won by a landslide.
we can shoot down the whole myth of a non-existent qualified workforce as well:
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p>Kind of makes you wonder what the real reason for increasing quotas might be. Also makes you wonder why the Gov wants to encourage kids to go into certain high tech fields where (if the H1B visa trend continues) they stand little chance of competing for well paying jobs. If you sell out your brightest kids by contributing to this myth, why bother even wasting the time on education?
Between casinos and this, I really am starting to feel some buyer’s remorse over Governor Patrick. He has certainly promised to be one thing over the campaign (a progressive) and is instead bowing down to corporate interests.
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p>I’m not abandoning hope that the Governor will turn things around, but these issues are concerning me in ways that curtains and cadillacs never did. I appreciate the Governor’s efforts on glbt causes, as well as several other important things, but it’s clear this administration is taking a turn for the worse and unless Governor Patrick changes course, I may very well be open to a primary challenger come 2010.
All this goes to show what happens when people get duped into mistaking private decisions with public experiences. “No political experience” is “no political experience” and with “no political experience” one has NOTHING with which to evaluate someone … Oh yeah, but Reily didnt speak as flowery, ah well … Sounds like a lot of the current presidential pack … The Hillary ad about a clear record of 35 years of public service comes to mind … People should stop dreaming and choose from amongst the cards that they are actualy dealt … the three of diamonds is still the three of diamonds no matter how much you wish it was something else …
Corporations don’t pay taxes. Absent a corporate money tree in the basement they collect taxes by raising the price of products, reducing the wages of their employees or cutting the return to shareholders.
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p>If Mr. Patrick or the Legislature chooses to “close the loopholes” and lower the rates and reform the corporate tax structure, it’ll be the most significant and meaningful legislation of the administration to date, and something to actually boast about.
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p>The question is will Mr. Patrick actually push for the lower rates and closed loopholes or, as I claimed months ago, does he lack the political courage to meaningfully undertake such effort (as he has done so far following his statement that his administration would consider reducing State police overtime).