Statement on Governor Baker’s Sales Tax Holiday Proposal

“MassBudget holds a vision of an economically and racially just Commonwealth, one that is supported by fair and forward-thinking state tax and budget policy. Seen through that lens, the Governor’s proposal to suspend the state’s sales tax for August and September presents challenges. On the one hand, shifting our state tax system away from taxes like the sales tax, that fall most heavily on low-income households, makes good sense.  Unfortunately, spending the surplus this way forecloses  the ability to make investments that will transform opportunities for everyone in our Commonwealth – particularly for our low-income and BIPOC communities.

For instance, the tax dollars the Commonwealth would lose from this 2-month sales tax holiday could support local schools by accelerating funding for the Student Opportunity Act, provide opportunities for affordable childcare that will help businesses  and families, and encourage travel by enabling transit authorities to stop collecting burdensome bus fares. These and many other options exist for lawmakers to better target support to those communities and businesses in greatest need.”

Latest

FAS 109, Single Sales Factor Apportionment, and Deferred Corporate Tax Deductions

As the Legislature considers elements of a possible tax package, it is worth focusing on a number of interrelated corporate tax issues that are now – or may become – part of the mix. At the heart of these interrelated issues is a problematic, state-level corporate tax break referred to as FAS 109.

Read More →

When A Surplus Is Not Extra

Sometimes a “surplus” is not really a surplus at all, and the term “tax surplus” can be particularly misleading. A tax surplus occurs when tax collections come in higher than the amount expected when the state created its budget at the beginning of the fiscal year. When that initial estimate turns out to be too low, there is a “surplus.” It does not mean that the state budget has already met the needs of the moment or that there is extra unneeded revenue.

Read More →

Options to Adjust the Estate Tax While Retaining Revenue and Progressivity

The Massachusetts Budget and Policy Center was asked to outline options for changes to the estate tax that would preserve revenue, maintain progressivity, and also cut taxes on or exempt estates with a taxable value up to around $1.2 million. Since households subject to the estate tax are among the state’s wealthiest taxpayers, any reductions to revenue from the estate tax represent a transfer of wealth from the Commonwealth to its wealthiest families. Even so, some options are better than others.

Read More →
Scroll to Top

Get news from Massachusetts Budget and Policy Center in your inbox.