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Radio interview on Corporate Taxes

MassBudget and Policy Center President Marie Frances-Rivera and Senior Policy Analyst Kurt Wise on their recent study on corporate taxes in Massachusetts. (~ 24:20 minutes into the segment)

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What’s behind the legislative budget stalemate

The Massachusetts Budget and Policy Center, a more left-leaning think tank, seemed to prefer the Senate’s approach. The center says Massachusetts businesses received an estimated $4 billion in tax relief from a federal tax cut and don’t need the additional savings that decoupling would provide.

“The Commonwealth should not be seeking additional ways to reduce state-level income taxes on profitable multi-state and multi-national corporations operating in Massachusetts. This approach provides an unwarranted tax advantage to a subset of businesses: those with multi-state and/or multi-national subsidiaries and sophisticated accounting departments,” the organization said in a position paper released Monday. “Providing such corporate tax cuts also deprives the Commonwealth of much-needed revenue for investments in education, transportation and more — all of which allow both businesses and communities throughout the state to thrive.”

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Analysis: Business tax hike would address inequity

Corporate excise taxes in the 1980s accounted for about 16 percent of the state’s total tax haul each year, according to MassBudget. The corporate share of the state’s annual tax take, however, has declined to an average of 10.6 percent over the past decade.

The decline, the center said, corresponds with an increase in corporate profits as a share of U.S. income from 9.1 percent to 13 percent.

“At a time when profits are soaring, taxes on those profits should not be delivering a smaller slice of our total tax pie. Kids, commuters and communities across the state need profitable corporations doing business here in Massachusetts to step up and do more, not less,” said MassBudget President Marie-Frances Rivera.

The report’s author, senior policy analyst Kurt Wise, said there is “no one reason” why the corporate share of tax collections has declined while profits have grown, but the dip did occur after the Legislature in 2008 approved a phased-in reduction in the corporate tax rate from 9.5 percent to 8 percent.

The center also blamed “increasingly aggressive” tax avoidance strategies and corporate tax breaks adopted by the Legislature, sometimes as a way to encourage job creation.

Wise also acknowledged that the state has increased sales and tobacco tax rates and began taxing goods and services that weren’t taxed in the 1980s, including casinos, marijuana, short-term rentals and ride-hailing services like Uber. Those new sources of revenue could, to varying degrees, naturally shrink the business community’s share of the total tax burden.

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Easier than you think: Finding fair revenue that hides in plain sight

As one of the highest-income states in the country, people might think Massachusetts leads the nation in bold initiatives like universal childcare, debt-free college, and electrified high-speed rail across the state. Instead, year after year, we defer these dreams. Read our president’s latest on how the Commonwealth can find the revenue we need to sustain economic mobility for all.

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Our View: Another tax at the pump?

The Massachusetts Budget and Policy Center reports the tax hit on Bay State drivers is now about a dime cheaper than the average paid by drivers on state and local taxes in most parts of the country, according to State House News Service. That’s surprising and a benefit likely wiped away by the extra cost of delivering gas from refineries to New England. Still, given this state’s tendencies, it’s sure to be fodder for those who argue for a tax hike. One advocacy group suggests Massachusetts motorists could take on as much as 25 cents per gallon more.

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Business groups support increase in gas tax, ride share fees for transportation fixes

Every penny added to the state’s gas tax could produce roughly $32 million in new annual revenue, the Massachusetts Budget and Policy Center wrote in a report earlier this month. The report also warned that increasing the gas tax will disproportionately impact low- and moderate-income households, and may be undermined by the state’s long-term goal of reducing its carbon footprint.

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House leaders talk transpo taxes

The Massachusetts Budget and Policy Center earlier this month published a paper in which they estimated that the state could raise about $32 million in additional revenue for every cent added to the state’s 24-cent gas tax. That estimate was based on the $769.1 million generated by the gas tax in fiscal 2018.

The national average in state and local taxes and fees paid by drivers at the pump is about 10 cents higher than the gas tax in Massachusetts, according to MassBudget. Transportation for Massachusetts, an advocacy group which has been advocating for new investments, has come out in favor of a 25-cent gas tax hike.

MassBudget, however, has warned that increasing the gas tax will disproportionately impact low- and moderate-income households, and may be undercut by the state’s long-term goal of reducing its carbon footprint.

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Our Opinion: Corporate tax break needs better argument

Massachusetts business groups will need a better argument than the one presented by Rep. Cusack if they are to get their change to the 2017 law passed. They will also have to address the report from the Massachusetts Budget and Policy Center claiming that the state would lose $37 million a year in revenue if this change is passed. While this is less than 0.1 percent of the state budget, the flawed process here is as significant if not more than the revenue figure.

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Mass Education Funding Forum Comes To Sudbury

The League of Women Voters of Sudbury and First Parish of Sudbury Unitarian Universalist are co-sponsoring a public forum “State Education Funding: Does It Make the Grade?”. Speakers include Anastasia Martinez, policy analyst with the Massachusetts Budget and Policy Center, an independent research and analysis organization, will outline the changes in education funding proposed in the pending legislation, the Student Opportunity Act, and the impact those changes will have on school districts.

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A caution on hiking ‘regressive’ gas tax

Gas taxes are a “regressive” approach to generating revenue that “tend to hit those with low and moderate incomes the hardest,” according to the report issued by the liberal-leaning Massachusetts Budget and Policy Center. The effect is particularly acute in rural areas, where people must drive longer distances for everything from work to grocery shopping, and there are often not viable public transportation alternatives.

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Report: Higher Gas Tax, Like Higher Transit Fares, Could Increase Inequality

While many sustainable transportation advocates champion higher gasoline taxes as a way to pay for transportation improvements, a new report from the Massachusetts Budget and Policy Center (MassBudget) warns that higher gasoline taxes will exacerbate the state’s growing income inequality — unless the state simultaneously passes other tax policies to benefit low-income families.

A 10-cent tax increase would cost, on average, 0.20 percent of income for the lowest-income households, and less than 0.001 percent of earnings for households from the highest 1 percent of incomes, according to MassBudget.
“There are real tradeoffs with the gas tax and it’s something that there needs to be a real adult conversation about,” said the report’s author, Phineas Baxandall of the Massachusetts Budget and Policy Center. “If we’re looking to regressive forms of taxes (to fund transportation improvements), then we need to couple that with other kinds of more progressive tax policies, instead of making Massachusetts less equitable.”

Many environmentalists like the idea of a gasoline tax because a higher price on fossil fuels can, over time, influence consumers to drive less.

But MassBudget’s report warns that “consumers can be less responsive to prices of gasoline than for many other goods because there are often few viable alternatives to car travel.”

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Quincy lawmaker faces backlash over ethnic identification bill

At a packed hearing on the bill Tuesday, critics of the legislation blasted it as a form of racial profiling and accused its backers of playing into the hands of white supremacists. Other speakers, including the heads of several organizations serving minority populations, said the data sought by the bill would help them better understand and serve the needs of individual ethnic groups.

“Making good policy is about knowing the community and figuring out what their needs are,” said Colin Jones, who works the for Massachusetts Budget and Policy Center. “Broad categories may be missing key stories.”

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House Dems dump Baker’s ‘working families’ tax relief

Kurt Wise, senior policy analyst at the Massachusetts Budget and Policy Center, questioned the use of one-time surplus tax revenues to drive permanent tax policy changes and suggested adjustments to the earned income tax credit would be a more targeted way to help lower income taxpayers.

The business tax break, Wise said, would only add to about $140 billion in tax cuts for corporations included in the federal tax law rewrite favored by President Trump and Republicans in Congress.

While a $37 million break in a $42 billion state budget is “not an absolutely huge giveaway,” Wise said policymakers should be looking at the state and local tax structure for ways to ensure people in different income groups are paying the same effective tax rates. “This moves us in the opposite direction,” he said.

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Beacon Hill Roll Call, October 11, 2019

“In Massachusetts, living in high-poverty neighborhoods affects six percent of all children, and these neighborhoods are mostly in the Gateway Cities and the City of Boston. Growing up in high-poverty neighborhoods has long-term impacts on our kids. All children and families deserve quality education, housing and access to opportunity. Investing in solutions that uplift children in poverty will create the change needed for everyone in the commonwealth to thrive,” Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center, on a report that 90,000 kids in Massachusetts live in concentrated poverty.

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What Are The Effects Of Childhood Poverty?

Rath: In terms of addressing this, you said money does matter, and in its report, the Massachusetts Budget and Policy Center calls for changes to taxes, education funding, public transit, all sorts of things. What do you think would have the biggest impact in fixing these problems we’re talking about?

Zaff: There are a few things to keep in mind. So one, I think, is very important. Through all of this, often what gets conflated is this idea of risk and deficit in the individuals themselves. And I think what’s important to realize — and we’ve seen this time and again in our own work — is that the young people living in these communities concentrated in poverty have just as much potential in capacity as those in much more economically advantaged communities. And so that’s a reason for hope. Every young person has potential to thrive. We know this from science. And so what we also know is that the capacities of those young people need to be matched with appropriate supports. And so you know, a term now being used a lot is instead of achievement gaps, is really an opportunity gap.

And so how do we close the gap in opportunities so young people have these opportunities to reach their own potential. As Mass. Budget has suggested, one way is through education, and we know that education can be a key driver of economic mobility.

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