State and Local Finance

Former Supreme Court Justice Oliver Wendell Holmes taught us that "Taxes are what we pay for a civilized society." The state must collect enough taxes to fund the services we need and do it fairly. Today, Massachusetts faces a revenue crisis caused by more than forty tax cuts during the 1990s that have reduced state revenue by almost $3 billion dollars annually. I have led the opposition to the tax cutting movement and I support closing tax loopholes that raise revenues while easing the property tax burden on Massachusetts’ cities and towns.

Closing Corporate Tax Loopholes

For the last three terms, I have initiated efforts to close corporate tax loopholes, filing the legislation and leading the floor fights on these issues. For years, multi-state companies have exploited loopholes in the Massachusetts state tax system to avoid paying taxes on a large portion of their profits. In fact, the share of total state taxes contributed by corporate income taxes in Massachusetts has dropped from 13.0% in 1989 to only 8.1% in 2000 according to the U.S. Census Bureau. It's unfair for multi-state companies to use our public resources (highways, public safety officers, etc.) while residents and other in-state businesses pick up their tab.

I support enacting the following reforms, which would generate more than $500 million annually by making multi-state corporations pay their fare share and level the playing field for in-state businesses.

Municipal Taxation

It is critical that we provide our cities and towns with options other than Proposition 2½ overrides to raise needed revenues. I was an original cosponsor of the act that would close an outdated loophole exempting telephone companies from paying an estimated $78 million in local property taxes on telephone poles and equipment. The exemption was first adopted in 1915 as a measure to encourage universal telephone service, but is clearly unwarranted over ninety years later.

I was also an original cosponsor of the Local Option Meals and Hotel Tax, which would allow cities and towns to adopt a 1-2% meals tax and raise the maximum local room occupancy tax from 4 to 5%. This act would generate $120 million for local governments if every community adopted a 1% meals tax.