Pioneer Supports Legal Challenge to Misleading Tax Ballot Language, Releases Video

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Summary language fails to point out that new surtax revenue could just replace cuts, not increase overall education and transportation spending

BOSTON – Pioneer Institute supports the diverse and bipartisan group that filed a complaint with the Massachusetts Supreme Judicial Court (SJC) challenging the summary language meant to provide an accurate description of the tax hike amendment to voters. The language was approved by the Attorney General and Secretary of the Commonwealth when a similar amendment was proposed in 2018, and unless the lawsuit is successful, will likely appear on the Massachusetts ballot in November.

The amendment to the state Constitution would add an additional 4 percent tax on all annual income over $1 million.  The proposed summary language put forward by the Attorney General and the Secretary states that the revenue from the tax will be dedicated to fund public education and transportation and, in doing so, neglects to disclose that while receipts from the tax would be directed to those areas, the legislature would be free to redirect current funding for public education and transportation to other priorities. It does not require an additional cent to be spent on our schools, roads, bridges and public transportation.

“Proponents may willfully mislabel this tax, but the AG and the Secretary should not,” said Jim Stergios, executive director of Pioneer Institute.  “In 2018, even the Attorney General’s office, which was defending the proposal before the SJC argued that it was ‘just a tax’ – it wouldn’t necessarily increase spending on transportation and education.”

A 2018 effort to bring the amendment before voters ended when the SJC found that the proposed amendment violated a ban on citizen-initiated ballot initiatives that combine unrelated subjects; in this case a new graduated income tax and a directive about where revenue from the tax would be spent. That ban does not apply to constitutional amendments proposed by the legislature, and in 2019 and 2021 the legislature voted to put the tax amendment on the November 2022 ballot.

Pioneer today is also releasing a video from arguments presented during the 2018 oral arguments. In it, the lawyer arguing the Attorney General’s case in support of the tax amendment explicitly agrees, in response to a question from the late SJC Chief Justice Ralph Gants, that the amendment might not result in any overall increase in education and transportation.

Moreover, Attorney General Healey’s own brief from the 2018 case reads, “the Legislature could choose to reduce spending in specified budget categories from other sources and replace it with new surtax revenue.”

Today’s complaint is based on the argument made in the 2021 Pioneer Institute White Paper, “The Graduated Income Tax Amendment – A Shell Game?“  The study was authored by Kevin Martin, the attorney who prepared and filed today’s complaint for the plaintiffs.

“It’s hard to dismiss the possibility of legislators simply using the surtax money to backfill education and transportation cuts when they twice rejected amendments that would have required that the revenue be over and above what’s already been appropriated,” said Pioneer Research Director and former Massachusetts Inspector General Greg Sullivan.

During their debates on the proposed ballot measure, legislators made their intentions crystal clear regarding how new tax revenues will be spent by rejecting two amendments that would have required that the new revenues be invested in addition to existing expenditures.  Both amendments were defeated – one by a 154-39 vote, the other by a 156-40 margin.

“As an employer, I’m most concerned about the devastating impact this tax hike would have on businesses and re-investment in growth,” said Cape Cod Lumber CEO Harvey Hurvitz.  “But the thing that’s troubling about it is that it’s not even about education and transportation investments.”

About Pioneer

Pioneer Institute develops and communicates dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond. Success for Pioneer is when the citizens of our state and nation prosper and our society thrives because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and when our government is limited, accountable and transparent. Pioneer believes that America is at its best when our citizenry is well-educated, committed to liberty, personal responsibility, and free enterprise, and both willing and able to test their beliefs based on facts and the free exchange of ideas.

Get Updates on Our Economic Opportunity Research

Related Content

Pioneer Institute Statement on Question 1

Yesterday, voters came closer than many expected to rejecting the largest tax increase in Massachusetts history, even though opponents were dramatically outspent by the unions that bankrolled the amendment to the state Constitution. 

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.

Survey of Business Sentiment: MA Income Tax Hike Would Lead to Employer Exodus

Nearly three quarters (73 percent) of Massachusetts business leaders think business associates will leave the state if a constitutional amendment appearing on the November ballot to hike taxes is successful, according to a survey conducted by Pioneer Institute.

As States Compete for Talent and Families, Massachusetts Experienced a Six-Fold Increase in Lost Wealth Compared to a Decade Earlier

With competition for businesses and talent heating up across the country, in 2020 Massachusetts shed taxpayers and wealth at a clip six times faster than even just a decade ago. Between 2010 to 2020, Massachusetts’ net loss of adjusted gross Income (AGI) to other states due to migration grew from $422 million to $2.6 billion, according to recently released IRS data now available on Pioneer Institute’s Massachusetts IRS Data Discovery website. Over 71 percent of the loss was to Florida and New Hampshire, both no income tax states.

Book Reveals How Tax Hike Amendment Would Damage Commonwealth’s Economic Competitiveness

If adopted, a constitutional amendment to hike state taxes that will appear on the ballot in November could erase the hard-earned progress Massachusetts has achieved toward economic competitiveness over the last 25 years and may not result in any additional education and transportation funding, according to a new book from Pioneer Institute, entitled Back to Taxachusetts?: How the proposed tax amendment would upend one of the nation’s best economies, which is a distillation of two dozen academic studies.

Study: Legislature Likely to Reduce Spending on Education and Transportation from Other Revenue Sources, Replace Cuts with Surtax Money

Revenue from a ballot initiative to amend the state Constitution and raise income taxes on households and businesses by adopting a graduated income tax structure would supposedly provide resources for transportation and public education, but a new study published by Pioneer Institute finds that, were the tax amendment to pass, the money would be fungible and much of it likely spent on general budget measures.   

Pioneer Supports Legal Challenge to Misleading Tax Ballot Language, Releases Video

Pioneer Institute supports the diverse and bipartisan group that filed a complaint with the Massachusetts Supreme Judicial Court (SJC) challenging the summary language meant to provide an accurate description of the tax hike amendment to voters. The language was approved by the Attorney General and Secretary of the Commonwealth when a similar amendment was proposed in 2018, and unless the lawsuit is successful, will likely appear on the Massachusetts ballot in November.

Study: Tax Up For A Vote In November Would Ensnare Over Three Times More Taxpayers Than Previously Estimated

Analyses from the Massachusetts Department of Revenue (MADOR, 2016) and Tufts University’s Center for State Policy Analysis (2022) dramatically underestimated the number of households and businesses impacted by the constitutionally-imposed tax hike that the legislature is putting before voters in November 2022, according to a new study from Pioneer Institute.

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

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.

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

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.