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 When it was shown to negatively impact the Commonwealth’s economy, the Legislature quickly repealed it.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

At a Glance: Who Moved to Massachusetts in 2022? 

State-to-state migration can have serious impacts on the local economy. Migrants to Massachusetts come from all over the country, but significant portions of both new taxpayers and new taxable income come from just a few sources, such as New England, New York, Florida, and California.

Is Free Community College What Massachusetts Needs?

The Massachusetts Senate proposed making community college tuition free for all residents of the Commonwealth as part of its FY2025 budget. Pioneer explores whether this program is what Massachusetts needs to prepare its residents for gainful employment and how it interacts with the state's extensive workforce development infrastructure.

Unemployment in Massachusetts by Race

Unemployment rates vary based on racial groups. Most minority groups face higher unemployment rates in Massachusetts than the majority White population.

The Housing Crisis has a Hand in Massachusetts Out-migration Trends

Recently published IRS data shows that net out-migration from…

Latest IRS Migration Data Show Exodus from Massachusetts Continues

Massachusetts shed more than double the amount of adjusted gross income (AGI) in 2022 than any year prior to 2020, making it fifth among states in net AGI out-migration behind only California, New York, Illinois and New Jersey, according to data released Thursday by the Internal Revenue Service. 

Massachusetts Legislature Procrastinates Once Again

There are less than seven weeks left to the Massachusetts Legislature’s…

Study Finds Prevalence of Entrepreneurship Tied to Regulatory Environment, Portion of Immigrants

The prevalence of entrepreneurship is linked to both the regulatory environment and the portion of foreign-born immigrants in a jurisdiction, according to a new study published by Pioneer Institute.

Thoughts on Outmigration and Competitiveness

?Thoughts on Out Migration and Competitiveness   A…

Study Finds Supply Shortage at the Heart of Greater Boston Housing Crisis

Construction costs, land use regulation and zoning among…

Commentary On The Senate Ways And Means Committee FY2025 Budget 

The Senate Ways and Means Committee (SWM) released its FY2025 budget on May 7th.  This spending plan totals $57.9 billion, an increase of $1.8 billion over the FY2024 General Appropriations Act (GAA).  Like the Governor’s and House’s versions of the budget, the SWM budget is based on the consensus revenue estimate of $41.5 billion in tax revenue - a decrease of $208 million from last year’s consensus figure.

Pioneer Statement on Continuing Slide in Massachusetts’ Revenue

The Commonwealth’s tax collections continue to slide, totaling $3.594 billion in January, $268 million below what the state collected in January 2023, and short of the revised benchmark by $263 million. Massachusetts state government must live within its means by reducing FY2025 spending. The days of fiscal surpluses, unprecedented increases in year-over-year spending, and flowing federal aid have come to an end.

Pioneer Statement on Decline in State Revenues

The Commonwealth’s finances have stumbled hard in recent months, and based on a report the Department of Revenue (DOR) sent to the Legislature in January, the trend shows no signs of easing. Massachusetts needs a renewed emphasis on fiscal discipline and pro-growth policies to make the state economically competitive again.