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

Report Contrasts State Government and Private Sector Employment Changes During Pandemic

March 15, 2021

Massachusetts state government employment has been virtually flat during COVID-19 even as employment in the state’s private sector workforce remains nearly 10 percent below pre-pandemic levels, according to a new study published by Pioneer Institute. The study, “Public vs. Private Employment in Massachusetts: A Tale of Two Pandemics,” questions whether it makes sense to shield public agencies from last year’s recession at the expense of taxpayers.

Study Finds Massachusetts Graduated Income Tax May Be a “Blank Check” and Not Increase Funding for Designated Priorities

March 10, 2021

Advocates claim a proposed 4 percent surtax on high earners will raise nearly $2 billion per year for education and transportation, but similar tax hikes in other states resulted in highly discretionary rather than targeted spending, according to a new policy brief published by Pioneer Institute. That same result or worse is possible in Massachusetts because during the 2019 constitutional convention state legislators rejected — not just one, but two — proposed amendments requiring that the new revenues be directed to these purposes.

Report: Proposed Graduated Income Tax Might Not Increase State Education and Transportation Spending

March 2, 2021

While supporters of a state constitutional amendment that would impose a 4 percent tax rate hike on annual income over $1 million claim additional revenue from the surtax will fund public education and transportation needs, the amendment in no way assures that there will be new spending on these priorities. In fact, without violating the amendment, total state education and transportation funding could stay the same or even fall, according to a new review published by Pioneer Institute.

New Study Highlights Economic Fallout from California’s 2012 Tax Hike

February 22, 2021

A 2012 income and sales tax increase in California, named “Proposition 30,” stifled business activity, accelerated out-migration among the wealthy, and ultimately reduced the state’s tax base, according to a new study published by Pioneer Institute that aims to share empirical data about the impact of tax policy decisions.

New Study Finds Pandemic-Spurred Technologies Lowered Barriers to Exit in High-Cost States

February 10, 2021

Both employers and households will find it easier to leave major job centers as technologies made commonplace by the COVID-19 pandemic have led to a rethinking of the geography of work, according to a new study published by Pioneer Institute.

New Study Shows Significant Wealth Migration from Massachusetts to Florida, New Hampshire

February 1, 2021

Over the last 25 years, Massachusetts has consistently lost taxable income, especially to Florida and New Hampshire, via out-migration of the wealthy, according to a new Pioneer Institute study. In “Do The Wealthy Migrate Away From High-Tax States? A Comparison of Adjusted Gross Income Changes in Massachusetts and Florida,” Pioneer Institute Research Director Greg Sullivan and Research Assistant Andrew Mikula draw on IRS data showing aggregate migration flows by amount of adjusted gross income (AGI). The data show a persistent trend of wealth leaving high-tax states for low-tax ones, especially in the Sun Belt.

California Tax Experiment: Policy Makers Receive Valuable Economics Lesson

0 Comments

January 19, 2021

Host Joe Selvaggi talks with Stanford University Economics Professor Joshua Rauh about his research on the reaction of Californians to a tax increase, from his report, “The Behavioral Response to State Income Taxation of High Earners, Evidence from California.” Prof. Rauh shares how his research offers tax policy makers insight into the likely effects of similar increases in their own states, including here in Massachusetts.