Pioneer Institute and the Tax Foundation File Amicus Brief in Graduated Income Tax Ballot Initiative Case

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Brief argues that Proposition 80 violates the state constitution, would result in harmful fiscal policy

BOSTON – PioneerLegal, Pioneer Institute’s public-interest law initiative, together with the Tax Foundation, has filed an amicus brief with the Supreme Judicial Court in support of the Massachusetts High Technology Council and others, in the case Christopher Anderson et al. v. Maura Healey.

The plaintiffs assert that Proposition 80, a ballot initiative to install a graduated income tax for Massachusetts, violates the state constitution and should not be allowed to appear on the Commonwealth’s November ballot.

Proposition 80 calls for adding an additional 4 percent state tax on all annual taxable income above $1 million and earmarking the resulting revenue specifically for transportation and education.

The brief argues that Proposition 80 violates the state’s constitution, which forbids initiative petitions from bundling multiple, unrelated provisions and usurps the Legislature’s exclusive authority over the state treasury. It contends further that passage of the measure would result in poor and risky fiscal policy.

Proposition 80 combines three unrelated provisions: a tax increase, an appropriation for transportation, and an appropriation for education. Drafters of the state constitutional provision on initiative petitions sought to ensure that petitions express a single unified public policy statement that voters could accept or reject, and specifically sought to prevent the bundling of unpopular provisions like a tax increase with more popular ones such as increasing education and transportation funding.

The state constitution also forbids initiative petitions from including a “specific appropriation,” defined as seizing all revenue from a designated source and appropriating it for a specified use – in this case, transportation and education.  The provision is designed to ensure that special interests don’t usurp legislative control of the state treasury.

In 2014, a computer and software services tax was enacted to help balance the state budget. When it was shown to negatively impact the Commonwealth’s economy, the Legislature quickly repealed it.

In 2000, state voters approved a ballot initiative to reduce the state income tax to 5 percent by 2003.  When the economy cratered soon after its passage, the Legislature stepped in and froze the rate at 5.3 percent.

Since Proposition 80 would amend the state constitution, such swift action would be impossible.   The process of amending the constitution again to change or repeal Proposition 80 would take a minimum of three years.  This form of budgeting by ballot initiative is a textbook example of depriving the government of the flexibility required to efficiently address changed circumstances and unexpected crises.

“There’s a reason why setting fiscal policy by constitutional amendment is almost universally condemned,” said Pioneer Executive Director Jim Stergios.

The brief also cites research by Pioneer and other entities showing that states like Connecticut and New Jersey that enacted similar policies actually saw adverse economic consequences within just a few years.

“This tax increase would catapult Massachusetts from the middle of the pack to among states with the highest capital gains rate in the nation.  It would also significantly increase the taxes paid by many small pass-through businesses and encourage ‘tax flight’ by individual taxpayers,” said John Sivolella, Senior Fellow in Law and Policy at Pioneer, who leads PioneerLegal. “The overall effect would be to inhibit financial growth in the Commonwealth, and adversely affect state revenues.”

About Pioneer

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Get Updates on Our Economic Opportunity Research

Related Research

Where Did the Largest PPP Loans Go? Assessing the distribution of loans by industry

/
The coronavirus has wreaked havoc on all parts of the economy,…

Non-Profits Facing COVID-19: Charles River's Esplanade Association on Why It's No Walk in the Park

/
Join host Joe Selvaggi as he talks with Esplanade Association’s executive director Michael Nichols about how he and other non-profits adapt to a surge in demand for services while coping with a collapse in fundraising opportunities.

New Study Offers Guide to Recovery in MA Retail, Accommodation and Tourism, and Restaurant Sectors

A new guide to economic recovery in the retail and hospitality industries published by Pioneer Institute calls for the federal and state governments to consider consumption-based refundable tax credits for brick and mortar businesses; the federal government to conduct a detailed study of the costs and benefits of suspending employer-side payroll taxes; businesses to pay special attention to developing and marketing their cleanliness, hygiene and contactless procedures; and third-party customer review sites to include comments about the implementation of COVID safety measures to provide options and reassurance to safety-minded consumers

PPP Loan Tracker

/
To advance transparency regarding public funds, Pioneer Institute developed this Paycheck Protection Plan Loan Tracker. This web tool allows you to track PPP loans by recipient, lender, location, industry, and loan range. According to this data, from the Small Business Administration, 18,177 Massachusetts small businesses received PPP loans, which the companies claim retained 738,613 jobs.

Public Statement: Pioneer Institute Applauds U.S. Supreme Court Ruling in Espinoza School Choice Case

Pioneer Institute applauds today’s U.S. Supreme Court’s decision striking down a bigoted state constitutional amendment in Espinoza v. Montana Department of Revenue. Like Massachusetts, Montana is among nearly 40 states with so-called anti-aid amendments, which have roots in 19th century anti-Catholic, anti-immigrant discrimination.

Pioneer Institute Study Calls for Streamlining State Sales Tax Revenue Collection

At a time when state tax revenues are plummeting, a plan to modernize sales tax collection could get money into state coffers more quickly, according to a new policy brief published by Pioneer Institute.

Pioneer Institute Looks Ahead to the Protection of Civil Liberties

Challenges to Americans’ civil liberties have increased in recent years.  History teaches us that during national emergencies governments are even more likely to overstep and violate constitutionally guaranteed freedoms. To address this concern, Pioneer Institute has created “Respect My Rights,” a web-based hotline to which citizens can submit complaints and descriptions of violations they have experienced.

Even for the most remote part of Massachusetts (Franklin County), it’s far from business as usual

/
The Connecticut River valley is home to some of the most productive…

Study: Safely Reopening Office Buildings Will Require Planning, Innovation

/
Safely bringing employees back into workplaces presents a significant challenge for employers located in office buildings, particularly when it comes to elevator operations and building entry and exit.  To address the challenge, managers must develop plans to control the flow of workers, according to a new study published by Pioneer Institute.

38.8 percent of the Massachusetts workforce and 28.3 percent of the U.S. workforce have filed unemployment claims over the past ten weeks.

/
Data released today by the U.S. Department of Labor shows that 38.8 percent of the Massachusetts workforce and 28.3 percent of the U.S. workforce have filed unemployment claims since the COVID-19 unemployment surge began ten weeks ago.