Editorial Staff

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

/in , , , /by Editorial Staff
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 When it was shown to negatively impact the Commonwealth’s economy, the Legislature quickly repealed it.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

Jim Stergios on Why Immigrants Are Crucial to Our Success

This week on JobMakers, Host Denzil Mohammed talks with Jim Stergios, executive director of Pioneer Institute, about why Pioneer collaborated with The Immigrant Learning Center to produce this podcast. They discuss the overrepresentation of immigrants in terms of job creation in America, contrary to the myth that immigrants “take” jobs.

Economic Long Covid: Mixed Health Messages for Baystate Businesses

Hubwonk host Joe Selvaggi talks with NFIB’s Chris Carlozzi and Retailers Association of Massachusetts' Jon Hurst about the challenges and future prospects for businesses as they adapt to widespread consumer confusion caused by vague and often conflicting public health messaging from our political leadership.

Jeff Goldman on How Immigrants Keep America Competitive

This week on JobMakers, Host Denzil Mohammed talks with Jeff Goldman, immigration attorney and Chair of Massachusetts Governor Charlie Baker’s Advisory Council on Immigrants and Refugees, about how best to ensure that highly skilled and innovative immigrants can remain in the U.S., start companies, and create jobs for Americans.

Trevor Mattos Shows How Massachusetts Runs on Immigrants

This week on JobMakers, Host Denzil Mohammed talks with Trevor Mattos, research manager at Boston Indicators, the research center at The Boston Foundation, which educates state and local leaders on the important contributions immigrants are making. They discuss the urgency of this work, particularly in a time of divisive disinformation about immigrants and the uncertainty of the pandemic, and some of the surprising findings on the disproportionately large impact immigrant workers, entrepreneurs and innovators are having on the local economy

Danielle Goldman on Why the U.S. Needs Immigrant Talent

This week on JobMakers, Host Denzil Mohammed talks with Danielle Goldman, Co-Founder and Executive Director of the Open Avenues Foundation in Boston, about their work to help high-growth companies and start-ups retain the high-skilled, foreign-born talent they need through cap-exempt H-1B visas.

Study Suggests How to Advance Fairness, Predictability of “Payment in Lieu of Taxes” Programs Aimed at Nonprofits

A new white paper by Pioneer Institute calls for increased transparency over the basis for payment in lieu of taxes (“PILOT”) agreements between municipal governments and nonprofit organizations, while also encouraging nonprofits to publicize and expand the community benefits they provide.

Sonny Vu, Former Refugee, Uses Faith to Drive Innovation

This week on JobMakers, Host Denzil Mohammed talks with Sonny Vu, serial entrepreneur and investor, about his work across continents to develop new technologies, processes and products that have, what he calls, “positive, planet-level impact.” 

Public Statement on Implementation of the Charitable Giving Deduction

Despite being awash in cash, the state Legislature just overrode Gov. Charlie Baker’s veto of a provision to delay by yet another year a tax deduction for charitable donations. Rep. Mark Cusack, House chair of the Joint Committee on Revenue, said “it doesn’t mean no, just not now.” If not now, when?

Shane Smyth on How Immigrants Saved Restaurants

This week on JobMakers, Host Denzil Mohammed talks with Shane Smyth, owner of Hugh O’Neill’s Irish Pub in Malden, and co-owner of five more restaurants in Newton and Boston, one of which he launched during the pandemic. 

Understanding Property Tax, Property Value, and Tax Levy Trends in Massachusetts

0 Comments
/
According to Pioneer Institute’s MassAnalysis tool, single…

Anita Worden Takes Immigrants’ Skills to the Next Level

This week on JobMakers, Host Denzil Mohammed talks with Anita Worden, renewable energy business entrepreneur, about her work to improve representation of women in crucial economic sectors like technology, a place where they can innovate and have real impact. 

David Dyssegaard Kallick on the Facts about Immigration

This week on JobMakers, Host Denzil Mohammed talks with David Dyssegaard Kallick, Deputy Director of the nonprofit, nonpartisan think tank Fiscal Policy Institute and Assistant Visiting Professor at the Pratt Institute, on the impact of immigrants in local and national settings.