Warning that severe state budget cuts would only worsen the effects of the COVID-19 crisis and impair our economy’s recovery, the Raise Up Massachusetts coalition of community groups, faith-based organizations, and labor unions is launching the ‘Invest in Our Recovery’ campaign this week to advocate for increased state taxes on profitable corporations and their wealthy shareholders.
During a series of local outdoor demonstrations across the state beginning on Wednesday, July 15, community, faith, and labor advocates will join educators, healthcare and human service workers, bus drivers, and other public-sector workers to call on Massachusetts lawmakers to avoid devastating budget cuts, and instead invest in public services by asking profitable corporations and investors to pay their fair share.
“Lawmakers have a choice: Massachusetts can let deep budget cuts drive us further into a recession that deepens racial and economic inequities, or we can invest in public services that improve public health, grow our economy, and reduce racial inequality,” said Beth Huang, Executive Director of the Massachusetts Voter Table and a member of the Raise Up Massachusetts Steering Committee. “Our legislators can and should raise significant new revenue from profitable corporations and their shareholders this year, avoid destructive budget cuts, and instead, invest in healthcare, transportation, education, safety net programs, and other critical areas of the state budget that will drive an equitable recovery.”
A list of planned local demonstrations is below:
•BOSTON – Wednesday, July 15 at noon
Outside the Bruce C. Bolling Municipal Building, Nubian Square (2300 Washington Street, Roxbury)
•REVERE/EVERETT/CHELSEA/EAST BOSTON – Wednesday, July 15 at 6 p.m.
Revere Beach Bandstand (88 Revere Beach Blvd., Revere)
•LYNN/NORTH SHORE – Thursday, July 16 at noon
Outside Lynn City Hall (3 City Hall Square, Lynn)
The COVID-19 public health crisis and the crisis of economic disruption created by the pandemic have increased the needs of working families across the state, even as the state budget faces a multi-billion-dollar deficit. Workers need access to paid sick time so that workers who feel sick or may have been exposed can stay home and avoid spreading the virus. Students across the state need more support to handle the trauma and learning loss caused by school closures, not less. Direct care workers on the frontlines of the COVID-19 response effort need wages and proper workplace protections that reflect the essential work they do.
Children under the protection of the state, whose fragile lives are further disrupted by the pandemic, need added support and attention. Our public transportation systems need resources to run frequent service that allows for social distancing, and investments that will prevent traffic congestion from returning.
Throughout the crisis we’re facing, many large corporations continue to generate enormous profits that flow to their extremely wealthy shareholders. According to an analysis by the Institute for Policy Studies, the 19 billionaires in Massachusetts saw their wealth increase by a total of $17 billion during the first three months of the COVID-19 pandemic.
Raise Up Massachusetts is calling on legislators to adopt policies that ask profitable corporations and their wealthy shareholders to contribute more to our economic recovery:
•Increase the Tax Rate on Corporate Profits – Like most states, Massachusetts taxes corporate profits. Businesses that are turning a profit should be expected to contribute more to support the public goods on which their profits are based, especially during a public health and state fiscal crisis. Raising the current rate of 8.0% to the pre-2009 rate of 9.5% could generate $450 million to $525 million annually from profitable businesses, even during a recession.
•Tax Profits Shifted Overseas by Increasing the Tax Rate on GILTI (Global Intangible Low Taxed Income) – Many multinational corporations that do business in MA dodge taxes by using complex accounting schemes that make their MA-based profits appear to have been earned in offshore tax havens. This “income shifting” often places these profits beyond the reach of US tax authorities. Massachusetts should do the same as many other states and the federal government, and adopt a federal provision that identifies this shifted income and allows states to tax a portion of it. Could generate $200 – $400 million annually.
•Increase the Tax Rate that Investors Pay on Unearned Income – Over the last several decades, Massachusetts has reduced the tax rate on most types of unearned income (income from investments and other forms of asset ownership, such as stocks, bonds, and dividend and interest income). Today, most unearned income is taxed at the same rate as earned income (income from wages and salaries). Unearned income goes overwhelmingly to corporate shareholders and other high-income individuals, who currently pay a smaller share of their income toward state and local taxes in MA than the rest of us do. These high-income investors should be expected to contribute more to support the public goods on which we all depend. Each percentage point increase from the current rate of 5.0% could generate $400 to $500 million annually.
With these revenue policies, the ‘Invest in Our Recovery’ campaign aims to avoid destructive budget cuts that would only add to the harm the COVID-19 pandemic has caused, and instead move forward with investments that improve public health, grow our economy, and tackle racial inequalities.