Around New England

Tax Cuts in Massachusetts Have Led To $4 Billion-Plus in ‘Lost Revenue,’ Liberal Group Says

March 28, 2019

A left-of-center advocacy group is lamenting $4.15 billion in what it calls “lost revenue” from incremental decreases in the Massachusetts taxes since the late 1990s.

A report issued by the Massachusetts Budget and Policy Center highlights decreases in personal income tax (from 5.95 percent to 5.05 percent), long-term capital gains tax (from 6 percent to 5.05 percent), and dividend and interest income from stocks and savings accounts (12 percent to 5.05 percent); and an increase in the personal exemption for state income tax (from $2,200 to $4,400 for single filers and from $4,400 to $8,800 for married couples).

“These cuts have played a major role in reducing the revenue available to fund the state budget and, as a consequence, have severely limited the capacity to fund essential services in the Commonwealth,” the report says.

The essential services the report highlights are spending for public schools and transportation, which are the same services that were targeted in the failed attempt last year to bring to the voters a proposed 4 percent surtax on incomes of $1 million or more.

The report finds that the top 20 percent of earners in Massachusetts have benefited from 67 percent of the tax decreases since 1998, which the author finds unfair.

“Reviewing and reversing these rate cuts is just one example of the many opportunities to raise new revenue in ways that also can help turn our upside-down tax system right-side up,” said Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, in a written statement.

Supporters of tax decreases argue that they increase freedom and play a major role in recent growth and prosperity in Massachusetts.

Comments

comments


Read More