Phineas Baxandall is the Policy Director at the Massachusetts Budget and Policy Center. His past research at MassBudget focused on transportation, tax policy, and unemployment.
Before joining MassBudget, Phineas directed the Transportation and Tax & Budget programs for the U.S. Public Interest Research Group and its network of 30 state affiliate organizations.
Prior to his work with U.S. PIRG, Phineas was Assistant Director at the Taubman Center for State and Local Government and the Rappaport Institute for Greater Boston at Harvard’s Kennedy School of Government. He was a teaching fellow for eight years at Harvard’s Committee for Degrees in Social Studies, where he lectured on social policy and political economy. He has published on a variety of topics in political economy and public policy, and his 2004 book, Constructing Unemployment, was recently republished by Routledge press.
Phineas earned a Ph.D. from MIT in Political Science and a B.A. from Wesleyan University.
What Does the Federal Tax Law Mean for Massachusetts and How Might the Commonwealth Respond?
The new federal tax law reduces federal revenues by approximately $1.5 trillion largely by cutting taxes for corporations, people receiving inheritance from very large estates, and high-income owners of pass-through entities such as partnerships. The law provides reduced tax rates and relatively smaller tax reductions to most wage and salary earners while disproportionately benefiting those with high incomes. This paper examines the distribution of tax cuts, the impact of how they may be paid for, how the law interacts with Massachusetts policies, and what the Commonwealth could do to take its own direction different from the federal government.
Sweeter than SALT: Highest-Income Households Get Federal Tax Cuts More Than Twice SALT Losses
The federal government has enacted very large tax cuts targeted mostly at higher-income taxpayers. The resulting loss of an almost $1.5 trillion in federal revenue is likely to lead to cuts in federal support for programs that are important to people in Massachusetts and to the state budget. Amid these deep tax cuts, a new federal limit on the deductibility of state and local taxes (SALT) has received a lot of attention. Households that itemize deductions and pay over $10,000 in combined state and local taxes will no longer be able to deduct more than this amount when calculating their taxable income for federal taxes.
How Slow Sales Tax Growth Causes Funding Problems for the MBTA
Almost 20 years ago, a penny of the sales tax was dedicated to the MBTA to be a steadily growing source of revenue for the transit system. But despite some help from the Legislature, the sales tax transfer has grown slower than the economy, creating a persistent gap between the projected funds and actual sales tax transfers. Sales taxes have underperformed for the MBTA as a result of a shift to services, some transactions moving online, and exclusion of fast-growing meals tax revenues from the MBTA. An appendix explains the formula for determining the MBTA sales tax transfer and how other sales taxes are allocated.