Tax Reform in Massachusetts: Out of Commission?

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Massachusetts policymakers this week announced the formation of a fifteen-member commission to study the Commonwealth's corporate tax system. Massachusetts' corporate tax is certainly in need of an overhaul, as evidenced by its long-term erosion as a revenue source and by the broad-ranging reforms Governor Deval Patrick proposed earlier this year to address the issue.

Yet, in some respects, the formation of a commission may represent a step backwards. While a commission had been initially floated by the Governor in January, this particular panel was named only after the Massachusetts House of Representatives rejected the Governor's corporate tax reforms in its version of the FY 2008 budget. As Joan Vennochi of the Boston Globe has observed, the House's approach demonstrates that its leadership, in the person of Speaker Sal DiMasi, is "standing up for ... unfairness" and standing "with the coalition of the greedy at the Greater Boston Chamber of Commerce and other business-backed groups."

Indeed, the commission is heavy with members who hardly seem predisposed to support efforts to put an end to corporate tax avoidance. Upon being named to the commission, one member yawned, "Of all the priorities that the state faces, I would not put this near the top... The impetus for the commission really is a response to the governor's proposal rather than a crying need in itself." Another organization represented on the panel, the Associated Industries of Massachusetts (AIM), has boasted to its members that it has successfully "fought ... efforts to establish combined reporting" - the central element of the Governor's tax reform proposals.

For more on the need for combined reporting and other changes to the Massachusetts tax system, visit the Massachusetts Budget and Policy Center.

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