Hi , Today, I’m very excited to share with you all my biggest passion and priority: raising progressive revenue, or in other words turning Massachusetts’ upside down tax code right side up.
What is an upside down tax code? It is simply the complete opposite of fair. In Massachusetts, if you’re a janitor, paraprofessional, homecare worker who earns $20,000 per year, you currently pay a much higher share of your income in state and local taxes than someone who earns $1 million per year. A $1 million per year income is equivalent to earning $20,000 a week. |
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This is a morally reprehensible and deep injustice. Income and wealth inequality statewide, nationwide, and worldwide continues to grow, and our state government is making inequality worse through this upside down tax code.
How does this happen? It’s actually been happening steadily over the past 30+ years. In fact, Massachusetts has cut taxes more than ALL other states except for Arizona and Alaska since 1977. It’s death by a thousand cuts, or death by a thousand tax breaks and handouts to the very wealthy through complex (and at times not so complex) tax code changes. |
Changing course is going to take a lot of vigilance on our part and I am proud to share a significant win in blocking Governor Baker’s proposal for tax breaks earlier this spring.
His proposal was egregious: together, all of the cuts would cost the state $348 million in lost revenue annually and the bulk of his proposal would only benefit the super wealthy. It seemed like a big “Thank You” gift to his donors on his way out the door. This is why I grilled Governor Baker during the hearing on his regressive tax breaks. Read a brief summary of the entire tax break proposal here and watch the full hearing here.
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Most notably Governor Baker tried to justify these permanent tax breaks by claiming the state is “flush with cash” from federal pandemic relief funding (such as the CARES Act and ARPA). This argument makes no sense when we only receive this federal funding as one-time relief to support those struggling direly through this pandemic.
Don’t just take my word for it, though. MassBudget, a non-partisan think tank that tracks and analyzes the budget and revenue policy, did a thorough review of Governor Baker’s proposed tax cuts:
Much of this federal money is temporary and the related tax surplus is also likely temporary. It is unwise to assume that the state has more revenue than it needs based on temporary pandemic relief, meaning this is not the time for the deep and lasting tax cuts proposed in [the Governor’s budget]. Moreover, the majority of the revenue loss and by far the most generous tax breaks in the bill come from changes that concentrate benefits to the state’s wealthiest residents—the people who need them least.
Here is a summary of one of the mechanisms to this tax break package: cutting the tax rate on short-term capital gains. The capital gains tax is a tax on earnings from selling investments, or a tax on capital. This is in contrast to when you earn a wage or salary working at your job, you pay income tax, or a tax on labor. Almost always labor is taxed at a much higher rate than capital. So in short, most of us pay taxes on income we earn from a hard day of work, and some people have it pretty darn sweet by taking money they already own, invest it, earn more money, then pay a much lower tax on those earnings without expending any labor (talk about win win!).
What is short-term capital gains? This is a tax on capital held for less than a year. So this isn’t saving up for retirement, this isn’t even for private equity investments (their investments are held for usually several years), this is largely investments such as hedge funds, high frequency trading, and something Somerville is all too familiar with, flipping real estate property to luxury condominiums. With all due respect, Governor Baker, these are not the “little guys” who need relief during the pandemic, nor would anyone argue that such tax relief would make sense for the sake of productivity for our economy.
This is unacceptable. Our neighbors need support to continue paying rent as wealthy corporate landlords continue raising rent at absurd rates. Our neighborhood restaurants, our locally-owned businesses, our community organizations, all deserve to survive as we recover from the pandemic. Our schools deserve to be fully funded (see the terrible conditions at the Winter Hill School!), our roads are in desperate need of repair, and we must be preparing our communities for climate-exacerbated emergencies like flooding and extreme weather. While we have money from the federal government — money that we’re likely going to stop receiving soon — we should be using it to make the maximum positive impact on the residents of Massachusetts. And beyond federal relief funding, we need to make our tax code progressive so that the wealthy are paying their fair share so that we can make long lasting and sustained investments to support our communities to thrive.
That’s why the House of Representatives removed the Governor’s wasteful tax breaks from our budget, and instead funneled a large amount of our aid dollars into funding schools, mental health, social services, debt relief, and those most impacted by the pandemic. I’ll send a part two of a breakdown of the House Budget very soon. |
How to keep the momentum: Fair Share Amendment This November, voters in Massachusetts will vote on whether or not to pass the Fair Share Amendment. The amendment will allow the state to improve our transportation and public education systems by making the ultra rich pay their fair share. Now, by ultra rich, we’re talking about people who earn more than a million dollars in a single year — about 15,000 individuals out of over 7 million in MA. The Fair Share Amendment would generate $2 billion a year, every year, for investments earmarked for transportation and public education.
We’re often told that those in power have to make “tough decisions” about who’s going to benefit from a policy and who will suffer. However, I reject that mentality — we have avenues to greatly improve the daily lives of people across the state, and this one has such a minute impact, just .04₵ for income over $1 million. A handful of ultra rich residents pay their fair share of taxes, and the entire state benefits from better roads, bridges, and public schools? It’s a no-brainer.
To learn more about Fair Share or to get involved with the campaign, check out their website. |
Office Hours for Ward 6 on Sunday June 12
Back by popular demand! Join me, State Senator Pat Jehlen, City Councilor Lance Davis, and School Committee Member Ellenor Barish for our joint coffee chat and office hours! We will be at Seven Hill Park (on the west side of Davis Square T stop) with some coffee, donuts, and conversation. Bring your questions or ideas, or just drop by to say hello to your fellow neighbors in Ward 6. See you soon! |
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Save the Date! Summer solstice campaign kickoff at Cantina La Mexicana Join us on the Summer Solstice, June 21st (my favorite day of the year because it has the most sunshine) for our campaign kickoff! The event will be from 7:00pm to 8:30pm, at Cantina La Mexicana in Union Square. |
Canvass with Team Erika
We will be launching canvasses to talk with neighbors about the most important issues they are facing in Somerville. This is critical work for me because your voice and your issue help drive my priorities in the State House. We are launching every Saturday and Sunday at 10am, hope to see you there! |
It is truly an honor to serve you all, please don’t hesitate to reach out to my office with your thoughts and questions about the budget, if you want to advocate for any bills, or need any help from government services. |
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