State charitable deduction, UI Trust Fund proposal will not benefit those most in need
Statement regarding the Fiscal Year 2021 Supplemental Budget released Wed. August 18, 2021
“While Governor Baker’s FY 2021 close-out budget attempts to give tax filers and struggling businesses a boost, these poorly targeted efforts will not benefit those who most need the help.
At a time of steep inequality, his proposal for a state charitable deduction would amount to a $300 million per year tax break mostly for those who make more than $1 million annually. If the state wants to help low- and moderate-income tax filers, it could increase the state’s EITC or offer this charitable deduction only to people who haven’t already claimed it in their federal tax returns.
The Governor’s budget also proposes dedicating $1 billion of our state’s surplus to the Unemployment Insurance Trust Fund. The Governor’s proposal is an across-the-board business-bailout rather than one that specifically supports struggling businesses. A $1 billion decision is not one that should be made lightly. Targeted grants and loans — particularly for communities of color — can be better and less expensive ways to support businesses that have struggled during the pandemic.
We hope the Legislature will consider better ways to target relief efforts when it takes up this proposal.”