BOSTON — The Raise Up Massachusetts coalition of community groups, faith-based organizations, and labor unions today released the following statement on the passage of a transportation revenue bill by the state House of Representatives:
“For months, advocates for major transportation investments and a more fair tax system have called for large, profitable corporations to do their part to support the transportation infrastructure we all rely on. Paired with the Fair Share Amendment, which is expected to be on the ballot in 2022, the legislation passed by the House today puts Massachusetts on the road to both a better statewide transportation system, and a more equitable approach to transportation funding.
“Corporate taxes are an essential part of this revenue package, and we are glad the House rejected pressure from corporate lobbyists to remove the tiered corporate minimum tax from the bill. Large corporations make massive profits by using our transportation infrastructure to move their goods and customers, and they must pay their share to help fund transportation improvements.
“We hope the Senate will pass a progressive revenue bill, including significant corporate taxes, that continues to raise substantial revenue for much-needed investments in transportation. We look forward to working with the House and Senate to see a fair and balanced transportation revenue bill passed into law this session, and to passing the Fair Share Amendment on the ballot in 2022.”
Raise Up Massachusetts strongly supports increased investment in the Commonwealth’s transportation systems. Since 2014, the coalition has led the campaign for the Fair Share Amendment, the proposed tax on annual incomes above $1 million, which would raise approximately $2 billion a year for spending on transportation and public education. In June, the Legislature advanced the Fair Share Amendment one step closer to the ballot with a constitutional convention vote of 147 in favor to 48 opposed. The amendment needs to receive another 50 percent vote of the constitutional convention during the 2021-2022 legislative session in order to be placed on the November 2022 ballot.
Raise Up Massachusetts is also deeply committed to equity and solving the problem of economic inequality in Massachusetts. Our state tax system is upside down: Low- and moderate-income households pay a larger share of their income in taxes than households with higher incomes do. In fact, the highest-income households in Massachusetts – those in the top 1 percent – pay a smaller share of their income in state and local taxes than does any other income group.
Large, profitable corporations move their goods on our publicly funded roads and bridges, bring their employees to work on our public transportation systems, and benefit from our highly educated workforce. But too many of these corporations pay only minimal taxes in Massachusetts because they exploit loopholes, tax breaks, and offshore tax havens to reduce their reported profits to tax authorities, allowing them to eliminate their tax burden. A 2018 report by the Council on State Taxation (COST), a corporate trade association, ranked Massachusetts in the bottom fifth of all states in terms of overall business tax levels and found that there are only eight other states in which businesses pay a smaller share of total state and local taxes. And corporations just received a massive federal tax cut, which is likely worth around $4 billion each year for just Massachusetts businesses, from Republicans and the Trump administration.
To ensure that all corporations pay some corporate tax regardless of how much they report in profits, the state has a corporate minimum tax, but it hasn’t changed in 30 years. In 2015, 70 percent of all businesses that reported paying corporate excise taxes in Massachusetts paid only the existing corporate minimum tax of $456 per year. While more recent data is not readily available, a 2004 Department of Revenue report found that 2,283 companies with gross receipts over $50 million — one-third of all such large companies — paid only the corporate minimum tax. The same report found that 207 companies with annual sales over $1 billion — a quarter of all such very large companies — paid only the corporate minimum tax.
A tiered corporate minimum tax, as proposed by Raise Up Massachusetts and included in the House transportation revenue bill, would ensure that large corporations pay a minimum in proportion to the size of their business in the state, while small businesses continue paying the current minimum. Under the House bill, the corporate minimum tax would reach $150,000 for companies with over $1 billion in Massachusetts sales (the highest of nine tiers), while companies with less than $1 million in Massachusetts sales would continue paying $456.
In August 2019, a statewide poll conducted for Raise Up Massachusetts found that 78 percent of likely voters in Massachusetts support “ensuring that all large companies pay taxes in proportion to their level of business activity in the state.”
Raise Up Massachusetts is a coalition of community groups, faith-based organizations, and labor unions committed to building an economy that invests in families, gives everyone the opportunity to succeed, and creates broadly shared prosperity. Since our coalition came together in 2013, we have nearly doubled wages for hundreds of thousands of working people by winning two increases in the state’s minimum wage, won best-in-the-nation earned sick time and paid family and medical leave benefits for workers and their families, led the campaign for the Fair Share Amendment to invest in transportation and public education, and started to build an economy that works for all of us, not just those at the top. Learn more at raiseupma.org.
Contact: Andrew Farnitano, email@example.com, 925-917-1354