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.”
 
###

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 →

NEW: When A Surplus Is Not Extra

When A Surplus Is Not Extra New MassBudget report debunks the myth of tax “deluge” in the Commonwealth For Immediate Release: June 23, 2022 BOSTON, MA – The …

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 →
Scroll to Top

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