Massachusetts Near Bottom When It Comes To ‘Tax Freedom,’ Think Tank Says
By Matt McDonald | April 18, 2019, 7:40 EDT
The symbolic date when Massachusetts residents are said to start working for themselves instead of merely paying their tax burden to government is coming up next week, according to an organization that tracks taxes.
Massachusetts is tied for 43rd in the nation this year for earliest Tax Freedom Day, which this year occurs on Tuesday, April 23, according to the Tax Foundation, a pro-growth think tank in Washington D.C. that is skeptical about taxes.
Oil-rich Alaska is number one, on March 25. High-tax New York is 50th, at May 3. (That’s the same date as Washington D.C., the nation’s capital.)
Among New England states, New Hampshire’s Tax Freedom Day comes the earliest, on April 19. But even with no state income tax or state sales tax, it still isn’t among the top half of the country in per-capita tax burden, according to the Tax Foundation – it ranks 35th.
Maine ranks 38th, at April 20, not among the highest in part because of the policies of former Governor Paul LePage, who resisted tax hikes and sometimes didn’t spend appropriations the state legislature approved.
New Hampshire’s higher-tax neighbor, Vermont, ranks 42nd, at April 22.
Massachusetts, at 43rd, beats out only Rhode Island and Connecticut, tied for 46th at April 25.
Paul Craney, spokesman for the Massachusetts Fiscal Alliance, said earlier this week that recently approved taxes in Massachusetts, such as the one on Airbnb short-term rentals, endanger the already-tenuous restraint the state has when it comes to taxing. Craney noted that the Airbnb tax passed the legislature in December 2018 without a roll call vote.
Using Tax Freedom Day as a jumping-off point, he said the tax situation in Massachusetts is bad and in danger of getting worse.
“Your compensation for all work done since January essentially goes right into the pockets of the tax collectors until April 23. This date puts Massachusetts at # 43 in the country. Even California is better ranked. Only Connecticut and Rhode Island are worse than Massachusetts in New England,” Craney said in a written statement. “While we view that as atrociously low, Beacon Hill leadership likely see it as giving them some ‘wiggle-room’ for new ‘revenue enhancements’.”
But some advocates think Massachusetts doesn’t have enough taxes. High on their list of priorities is a 4 percent surtax on individual incomes of $1 million or more, which they hope state legislators will put on the general election ballot for voters to decide in 2022 as a constitutional amendment. The measure is called the Millionaires’ Tax or the Fair Share Amendment.
Supporters project tax revenues of $2 billion a year if the Millionaires’ Tax becomes law, which they say is sorely needed to improve deteriorating roads and bridges and the Massachusetts Bay Transportation Authority subway system as well as public schools. They also say the current flat income tax rate of 5.05 percent isn’t fair to poor people because it hits them harder than it does richer people.
Opponents say the Millionaires’ Tax would drive out rich people who are already highly mobile because of their wealth, drying up capital for new business ventures in the state as well as tax revenue. They also say a flat tax rate is fair because everyone pays the same rate but richer people pay more money than poorer people do.
Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, which supports the surtax on million-dollar incomes, described public spending as “investments” when she addressed a legislative committee last week, and said Massachusetts doesn’t make enough of them when it comes to public education and public transportation.
“Progressive revenue raising policies, such as the Fair Share Amendment would be a straightforward way to make investments today that would benefit generations to come,” Rivera said in written testimony to the Massachusetts Legislature’s Joint Committee on Revenue on Thursday, April 11.
Tax Freedom Day for Americans overall this year is April 16. That’s the same as it was in 2018, but five days earlier than it was in 2017, thanks to the Trump income and corporate tax cut of that year.
To calculate Tax Freedom Day for the country the Tax Foundation takes all federal, state, and local taxes and divides them by the aggregate income of Americans. According to the foundation, “In 2019 Americans will pay $3.42 million in federal taxes and $1.86 trillion in state and local taxes, for a total tax bill of $5.29 trillion …” That’s 29 percent of the nation’s projected aggregate income for the year. Twenty-nine percent of 365 days in the year is approximately 106 days, and the 106th day of the year is April 16 – which is why the Tax Foundation calls it Tax Freedom Day.
For states, the foundation performs a similar calculation, using the total amount of taxes for all levels of government that residents pay and dividing it by aggregate income.
Here’s a list of the states in order of ranking:
1. Alaska March 25
2. Oklahoma March 30
3. Florida April 4
3. Louisiana April 4
5. Alabama April 5
5. Tennessee April 5
5. Texas April 5
8. Idaho April 6
8. Montana April 6
10. Georgia April 7
10. South Dakota April 7
12. New Mexico April 8
12. Arkansas April 8
14. Arizona April 9
14. Wyoming April 9
14. Missouri April 9
14. Indiana April 9
14. Mississippi April 9
19. Kentucky April 10
19. South Carolina April 10
19. West Virginia April 10
22. North Carolina April 11
22. Utah April 11
24. Delaware April 12
24. Nebraska April 12
26. Colorado April 14
26. Ohio April 14
28. Kansas April 15
28. Iowa April 15
30. Michigan April 16
30. Pennsylvania April 16
30. Virginia April 16
33. Oregon April 18
33. Nevada April 18
35. Maryland April 19
35. New Hampshire April 19
35. Wisconsin April 19
38. California April 20
38. Maine April 20
38. Washington April 20
41. North Dakota April 21
42. Vermont April 22
43. Massachusetts April 23
43. Hawaii April 23
45. Illinois April 24
46. Connecticut April 25
46. Minnesota April 25
46. Rhode Island April 30
49. New Jersey April 30
50. New York May 3
