To recover from the COVID-19 pandemic, relieve the economic damage it has caused, and tackle racial inequities, Massachusetts needs to implement critical stabilization measures, like emergency paid sick time, food assistance, and eviction prevention. At the same time, we must lift our economy into an equitable recovery by making significant new investments in transportation, public health and education.
Making these investments will require new state revenue, which can be achieved by having multi-millionaires and profitable corporations pay their fair share. For years, multi-millionaires and large corporations have used low rates, tax breaks, and loopholes to avoid paying taxes. And while individuals and small businesses suffered during the COVID-19 crisis, many large corporations made record profits and investors saw their net worth skyrocket.
Because health equity can only be achieved by addressing poverty and racial inequities, MPHA is joining with Raise Up Massachusetts to support the following progressive revenue measures:
The Fair Share Amendment
Massachusetts has a reputation for progressive policies, but our state has the sixth-highest rate of income inequality in the country. In addition, our Constitution currently mandates a flat income tax of 5 percent. Rather than having a progressive tax system in which higher annual incomes are taxed at higher rates — as is true at the federal level and in many other states — income in Massachusetts is taxed at the same rate for everyone. The result is a deeply regressive tax system, in which low- and moderate-income households pay a higher share of their income in state and local taxes than households with higher incomes. To raise taxes on high earners, we must amend our Constitution.
The Fair Share Amendment will change the Massachusetts Constitution to implement a surtax of 4% on household incomes above $1 million. Raising the top marginal tax rate to 9% in Massachusetts will be in line with many similar states, such as Vermont (8.95%), New Jersey (8.97%), New York (9.65%), Minnesota (9.85%), Oregon (9.9%), Hawaii (11%), and California (13.3%). The new revenue, approximately $2 billion a year, will be earmarked for education, infrastructure and public transportation.
MPHA supports the Fair Share Amendment because it will enable investment in key drivers of health outcomes, such as public transportation. These kinds of investments will allow Massachusetts to substantially reduce health inequities and meet the challenges of the 21st century.
In an exciting step forward, the Massachusetts Legislature recently convened a Constitutional Convention and overwhelmingly approved putting this Amendment on the ballot in 2022. To show your support, take the Fair Share Amendment Pledge today!
FY22 Legislative Priorities
Tax Profits Shifted Overseas (HD452/SD173) by Sen. Sonia Chang-Díaz and Rep. Christine Barber
Many multinational corporations that do business in Massachusetts dodge taxes by using complex accounting schemes that make their US-based profits appear to have been earned in offshore tax havens. This “income shifting” often places these profits beyond the reach of US tax authorities. However, the federal government has found a way to identify this income and now allows states to tax a portion of it. Joining other states in taxing Global Intangible Low Taxed Income (GILTI) could generate $200-$400m annually.
Increase the Tax Rate on Corporate Profits (HD1020/SD428) by Sen. Sal DiDomenico and Rep Mary Keefe
Businesses rely on publicly-funded infrastructure to operate. However, decades of tax cuts combined with tax loopholes have meant that many corporations pay little to no income tax. Businesses that are turning a profit should be expected to contribute more to support the public goods on which their profits are based. This bill will raise the current rate of 8 percent to the pre-2010 rate of 9.5 percent and could generate $375-$500m annually.