Pioneer Institute Expects That Massachusetts Taxpayers Will Be Refunded $3.2B Due To State Revenue Cap

Pioneer Institute projects that the state will refund approximately $3.2 billion to taxpayers due to a state law sponsored by Citizens for Limited Taxation and voted on by taxpayers in 1986 that caps the amount of revenue the state can collect in any given year.

Under the cap, state revenues are limited based on the average growth of wages and salaries during the previous three years. While the Department of Revenue has disclosed collections through May, the state’s fiscal year ended on June 30 and June revenues are not yet available. To estimate the refund to taxpayers, Pioneer replicated the calculations prepared by the state auditor in prior years to determine if a refund was due and estimated June revenue based on historic trends.

The state auditor is required by law to perform the calculation annually based on information supplied by the Department of Revenue. This is the first time in decades the state will return money to the taxpayers.

“We’ve hit a tipping point where Massachusetts taxpayers have maxed out their obligations to fund state government,” said Pioneer Institute Executive Director Jim Stergios. “The lesson is: stable tax laws allow the economic growth that generates these giant government surpluses. So why are we even considering tax hikes?”

Related:

Public Statement on Massachusetts High Technology Council’s Challenge to the Graduated Income Tax Ballot Language

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The Massachusetts High Technology Council is right to insist on transparency in the language of a tax hike amendment scheduled to appear on the Massachusetts state ballot next year.

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Study: “Millionaire’s Tax” Would Have Far-Reaching Effects on “Pass-Through” Businesses

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A proposed graduated income tax that will appear on the statewide ballot in November 2022 will have much more far-reaching implications than most people realize because the surtax also extends to “pass-through” income from entities such as S and limited liability corporations, partnerships, and sole proprietorships that are taxed on individual tax returns, according to a new study published by Pioneer Institute.

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A provision of the federal Tax Cuts and Jobs Act of 2017 strictly limiting deductions for state and local taxes (SALT) will greatly exacerbate the adverse effects of a proposal to create a constitutionally mandated graduated income tax, according to a new study published by Pioneer Institute.

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This Is No Time for a Tax Increase

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Proponents of a state constitutional amendment to add a 4 percent surtax on all households with annual income above $1 million frequently cite 2015 data from the Institute on Taxation and Economic Policy, which argues that the Massachusetts tax code is regressive, but a new study published by Pioneer Institute debunks many of the underlying assumptions used in ITEP’s 2015 report.

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Study Warns Massachusetts Tax Proposal Would Deter Investment, Stifling the “Innovation Economy”

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A state constitutional amendment promoted by the Massachusetts Teachers Association and the Service Employees International Union adding a 4 percent surtax to all annual income above $1 million could devastate innovative startups dependent on Boston’s financial services industry for funding, ultimately hampering the region’s recovery from the COVID-19 economic recession, according to a new study published by Pioneer Institute.

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