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 When it was shown to negatively impact the Commonwealth’s economy, the Legislature quickly repealed it.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

Roger Magalhaes Goes from Truck Driver to Industry Leader

This week on JobMakers, host Denzil Mohammed talks with Roger Magalhaes, immigrant from Brazil and founder of the firms Shades in Place window treatment installation and Trading Up Consulting, in Franklin, Massachusetts.

Rent Control Redux: Mayor’s Committee Likely to Provide Astroturf Over Expertise

Hubwonk host Joe Selvaggi talks with Doug Quatrocchi, executive director of Masslandlords.net about the historical effects of rent control in Boston and Cambridge in the past and discuss the gap between the stated goals and the likely outcome of Boston Mayor Wu’s 25 member Rent Stabilization Advisory Committee.

Avak Kahvejian on How Immigrants Drive Innovation

This week on JobMakers, host Denzil Mohammed talks with Dr. Avak Kahvejian, an inventor, entrepreneur and CEO as well as general partner at Flagship Pioneering, a life sciences venture capital company in Cambridge, Massachusetts.

Dr. Celina Miranda on Immigrant Entrepreneurs & Community Uplift

This week on JobMakers, host Denzil Mohammed talks with Dr. Celina Miranda, executive director of the Hyde Square Task Force in Jamaica Plain’s Latin Quarter, today one of the most diverse neighborhoods in Massachusetts.

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.   

Theresa Park on How Immigrants Revitalize U.S. Cities

This week on JobMakers, host Denzil Mohammed talks with Theresa Park, Deputy Director and Senior Executive Vice President at MassDevelopment, a group that offers financing and real estate solutions to drive economic growth across Massachusetts. An immigrant from Korea who moved to Lawrence, Massachusetts, Theresa saw first-hand how immigrants built their lives from the ground up, and in so doing brought economic and cultural vibrancy to their new home cities.

New Pioneer Institute Law Center to Focus on Educational Opportunity, Economic Freedom, and Accountable Government

Pioneer Institute is pleased to announce the formation of PioneerLegal, the first non-profit, public interest law firm of its kind in New England, to defend and promote educational options, accountable government and economic opportunity across the Northeast.

Reinier Moquete on the Audacity of Immigrant Entrepreneurship

This week on JobMakers, host Denzil Mohammed talks with Reinier Moquete, son of immigrants from the Dominican Republic and founder of CyberWarrior, a cyber security services provider in Boston, Massachusetts.

Dinesh Wadhwani Clears the Air with Light Technology

This week on JobMakers, host Denzil Mohammed talks with Dinesh Wadhwani, founder and CEO of ThinkLite, LLC in Natick, Massachusetts, and immigrant from Ghana.

Transit Innovation Explored: A Bus As Fast As A Train?

Hubwonk host Joe Selvaggi talks with transportation expert Ian Ollis about the findings of his new research paper, "Bus Rapid Transit: Costs and Benefits of a Transit Alternative," which examines the benefits of building Bus Rapid Transit to serve communities looking for faster transit alternatives to a car.

Study Finds Bus Rapid Transit Can Offer Cost-Effective Benefits

Bus rapid transit (BRT) incorporates unique features such as dedicated lanes to provide reliable and cost-effective service while reducing congestion and its detrimental environmental impacts, according to a new study published by Pioneer Institute.

Anuradha Sajjanhar, PhD on Immigrants’ Role in Pandemic Recovery

This week on JobMakers, host Denzil Mohammed talks with Dr. Anuradha Sajjanhar, lead researcher for the report Immigrant Essential Workers During the COVID-19 Pandemic published by The Immigrant Learning Center, co-producer of this podcast. She found that immigrants, despite playing an outsized role in industries deemed essential such as healthcare, food and agriculture, and the supply chain, were largely left out of federal and state support during the pandemic, which negatively affected their safety and their efforts to help Americans weather this crisis. The report offers a path forward, as you’ll learn in this week’s JobMakers.