The Massachusetts Supreme Judicial Court (SJC) issued a significant and definitive decision today, preventing the income tax ballot initiative from going before voters in November due to an inaccurate and insufficient summary of the proposed question’s effects on residents.
The ballot initiative proposed cutting the state’s income tax rate from 5 percent to 4 percent, which would impact long-term capital gains collections. Long-term capital gains are the profits from selling assets held for more than a year, all of which are heavily concentrated in the highest-income, predominantly white, households. However, the summary of the question, which was shared with signers and voters, completely left out the impact on long-term capital gains. The court’s ruling said this about the ballot initiative’s summary: “It is significantly misleading and likely to influence voters” and “[b]ecause this summary materially misstates the true scope of the proposal, it is unfair.”
Massachusetts Budget and Policy Center’s (MassBudget) research on the ballot initiative’s impact on capital gains was an integral part of this lawsuit. Additionally, MassBudget submitted an amicus brief to the SJC further documenting the harm potentially caused by the ballot initiative if it were to move forward.
Statement from Viviana Abreu-Hernandez, PhD, MassBudget President:
“This is a win for Massachusetts’ residents. The income tax ballot question was inaccurately presented to signers and voters. Cutting the income tax – the largest single source of state revenue – would have caused an extraordinary reduction in state revenue with damaging consequences to the state budget. This would have resulted in harmful and destabilizing funding cuts to public programs. MassBudget’s research shows that once fully phased in, the ballot initiative to cut the personal income tax rate would have reduced annual tax revenue by approximately $5 billion. During a time when Massachusetts is already facing federal funding cuts and families are struggling to afford to live in our state, any cuts to state revenue would be devastating. We need to invest in housing, health care, education, transportation, and other human service programs in key areas to make the state more affordable.”
