Congrats Concerns as Tax Reform Package Passed by Mass. Legislature
Congratulations to the organizations - Neighbor to Neighbor, Massachusetts Budget and Policy Center and others - that helped successfully close some big loopholes for corporations in the state tax system this week. Gov. Deval Patrick's signature on the bill yesterday also represented a rare victory for him over House Speaker Salvatore DiMasi - for whatever that's worth.
According to the MBPC's July 1 MassBudget Brief, the new law will help "significantly reduce opportunities for corporate tax avoidance." Its main new reform will help prevent locally-based multi-state corporations from declaring some of their profits in states with lower tax rates.
Unfortunately, it will also cut corporate income tax rates for C-Corporations (big fish), S-Corporations (little fish) and financial institutions (mostly big fish). The MBPC report says that current projections mean that state government will gain a significant amount of revenue every year until at least 2013 - however, the projected amount will drop every year after 2010 as the corporate tax cuts are phased in.
So Bay State residents can expect to see $291 million of extra revenue in Fiscal Year 2009, $390 million in FY 2010, $269 million in FY 2011, $190 million in FY 2012, and $163 million in FY 2013.
Meanwhile, C-Corporations will see their state tax rate - currently at 9.5% - drop to 8.75% in Tax Year 2010, 8.25% in 2011, and 8% in 2012. S-Corporations are expected to see similar cuts, but they are harder to project because owners of those companies are taxes on income directly. Financial institutions will see their tax rates from from 10.5% to 9%.
It's important to realize that corporations are getting this break at a time when Massachusetts working people are not really getting economic breaks of any kind. So it will be important to keep pushing the Legislature to help the poor, working and middle classes in the Commonwealth with extended unemployment coverage, expanded public jobs creation and income replacement programs, and a single-payer health care system - to name but a few.
Anything short of these types of core reforms is continuing 30-plus years of privileging profits over people in state government. So it's great that there will be more money in the state kitty - at least assuming that the economy doesn't go further in the tank in the next few years - but with the extra resources available there must be a hard push by progressive advocates to get the legislature to spend the extra funds in ways that advantage working families.
Viewers can find the MBPC MassBudget Brief and other up to the minute state budget information at http://www.massbudget.org.
Check out Neighbor to Neighbor's website at http://www.n2nma.org.
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Holiday Note
Happy 4th of July to all. Open Media Boston looks forward to fighting for the best principles upheld by America's founding fathers and mothers - and against all the bad, boneheaded and just-plain-evil principles that unfortunately accompanied them. So, warmongering and empire-building, no. Political and economic democracy and social justice for all, yes. Have a great time - be you protesting or just partying - be it a serious political holiday for you, or just "National Fuck-Off Day" like it is for most of us. And remember ... let's be careful out there ...
