Pioneer Institute

Public Statement on Implementation of the Charitable Giving Deduction

/in , , , , , /by Pioneer Institute
Share on Facebook
Share on Twitter
Share on
LinkedIn
+

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?

In 2000, Massachusetts voters approved by a 72-28 margin a charitable contribution tax deduction, which would allow taxpayers to recoup an additional five cents on the dollar in state taxes for a charitable gift, up to a maximum of $300. The deduction was suspended amid a budget crunch, and the legislature agreed that it would take effect when the state personal income tax was at 5 percent.

The income tax rate fell to 5 percent in January 2020. However, due to uncertainty about the impact of the COVID-19 pandemic on the state’s budget, Gov. Baker delayed the deduction’s implementation until 2022.

Last month, the governor vetoed a provision that would have delayed implementation of the charitable giving deduction yet again. According to Baker, “the combination of strong state revenues and serious needs facing non-profits and charitable organizations necessitates this tax deduction’s going into place.”

Why not incentivize those taxpayers who donate to contribute to their communities? The Massachusetts Nonprofit Network has estimated that a majority of charitable donations are from individuals with lower or middle-income backgrounds; so the charitable tax deduction would put money back into Massachusetts’ citizens pockets, no matter their socioeconomic status.

In 2019, it was estimated that the deduction could cost Massachusetts about $64 million in FY 2021, and about $300 million in full fiscal years after that. This sounds like a hefty number, but it must be put in a proper context.  If collections continue on the projected path, Massachusetts will collect about $31 billion in tax revenue in FY 2021. This surpasses forecast collections, which could lead to a substantial surplus at the end of FY 2021.

The people have spoken — 21 years ago. It’s time to let the voices of the many be heard.

Get Updates on Our Economic Opportunity Research

Related Content:

In Hampden County, COVID-19 exacerbates a stark employment divide between urban and rural areas

0 Comments
/
Hampden County, Massachusetts, home of Western New England’s…

As stay-at-home orders remain in place at the start of summer tourist season, COVID-19 takes a bite out of resort towns’ economies

0 Comments
/
Last month, Pioneer Institute showed that the hospitality and…

Survey Suggests Demand for Telecommuting After COVID-19 Crisis

Citing an avoidance of the commute and more flexible scheduling, nearly 63 percent of respondents to Pioneer Institute’s survey, “Will You Commute To Work When The COVID-19 Crisis Is Over?” expressed a preference to work from home one day a week, and a plurality preferred two to three days a week, even after a COVID-19 vaccine is available. Respondents cite social isolation as the biggest drawback of remote work. The survey was conducted from April 22nd to May 15th, and received responses from over 700 individuals.

It’s Time for the MBTA to Actively Engage Riders to Understand Their Commuting Plans

0 Comments
/
The MBTA should conduct a survey of mTicket app users regarding their future plans. Some may never work in offices again. Some will certainly do some workdays in the office and some at home. Others will be in offices and back to business as usual at some point. Using their responses, the T can calculate ridership and determine projected revenue.

Today’s Bureau of Labor Statistics estimate of a 15.1 percent unemployment rate in April only reflects half of Massachusetts’ COVID-19 unemployment surge

0 Comments
/
Today's release by the Bureau of Labor Statistics of a 15.1%…

32.9 percent of the Massachusetts workforce and 26.2 percent of the U.S. workforce have filed unemployment claims over the past nine weeks.

0 Comments
/
Data released today by the U.S. Department of the shows that 33.0 percent of the Massachusetts workforce and 26.2 percent of the U.S. workforce have filed unemployment claims since the COVID-19 unemployment surge began nine weeks ago.

Hubwonk Ep. 6: COVID-19 and Commerce: Main Street’s Concerns with Governor Baker’s Course

0 Comments
/
In this episode of Hubwonk, Host Joe Selvaggi & Pioneer Research Analyst Rebecca Paxton to get reactions to Massachusetts Governor Charlie Baker’s phased reopening, from the leaders of two statewide business organizations, NFIB and Retailers Association of Massachusetts.

Holyoke Soldiers’ Home Study Targets Inadequate Nursing Home Staffing Standards

Standards enforced at the federal and state levels are insufficient to address chronic staffing issues reported by staff and residents’ families at the Holyoke Soldiers’ Home, making that facility particularly vulnerable to the COVID-19 pandemic, according to new Pioneer Institute research.

28.9 percent of the Massachusetts workforce and 24.1 percent of the U.S. workforce have filed unemployment claims over the past eight weeks.

0 Comments
/
Data released yesterday by the U.S. Department of Labor and the Massachusetts Executive Office of Workforce Development show that 28.9 percent of the Massachusetts workforce and 24.1 percent  of the U.S. workforce have filed unemployment claims over the past eight weeks.

Time to follow the science, not fear

Over the past two months, we have all learned a great deal about COVID-19 and the efficacy of - and the new challenges created by - our policy responses. Pioneer Institute believes it is time to shift to a more thoughtful, science-based footing in our approach to COVID-19 policymaking. The following are principles for state and local public officials to consider as we move forward.

Where in Massachusetts is being hit hardest by unemployment due to COVID-19?

Pioneer’s new tool, called “COVID Unemployment Tracker,” provides an interactive look at how economic shutdowns in response to the COVID-19 pandemic are affecting jobs and lives across the state of Massachusetts.

The past seven weeks of Massachusetts unemployment claims total 25.8 percent of the civilian workforce.

0 Comments
/
The U.S. Department of Labor released its weekly report on jobless claims Thursday morning at 8:30 a.m., reporting that Massachusetts received 55,448 initial unemployment insurance (UI) claims during the week ended May 2. This brings the total of regular UI claims filed in Massachusetts since March 14, the beginning of the unemployment surge, to 781,110.