State commission reports after deep dive into tax breaks
Photo | Courtesy of Commonwealth of Massachusetts
Massachusetts State House
A commission created under a 2018 law to review tax breaks for businesses and individuals released its first biennial report last week, flagging several items for potential legislative review.
The 385-page document analyzes 26 tax expenditures - the term state government uses for all types of tax exemptions, deferrals, credits and deductions intended to accomplish certain goals and behaviors.
Auditor Suzanne Bump, a member of the Tax Expenditure Review Commission, said the report could "facilitate tax policy that is more targeted toward specific economic and societal goals, offering the possibility of raising more revenue more fairly, without resort to increases in actual tax rates."
The commission rated various statements about each tax break -- whether it is broadly used, whether its benefits justify its fiscal cost and whether it benefits small-businesses or low-income taxpayers -- on a scale from "strongly agree" to "strongly disagree."
The commission voted "strongly disagree" that exempting alcoholic beverages from the sales tax, at an annual cost of up to $131.6 million, has a benefit that justifies its cost and that its expenditure amount per taxpayer is meaningful as an incentive or benefit. "The Legislature may wish to examine the lower tax burden on placed on alcoholic beverage sales relative to other sales of other products," the report said.
The commission also strongly disagreed that a medical device user fee credit was meaningful as an incentive. The credit "was claimed by a limited number of, predominantly, large corporations," the panel wrote.
On the state's film tax credit, the commission landed between "strongly disagree" and "somewhat disagree" as to whether the benefit justified its cost.
"Commission members suggested that alternative approaches, such as direct subsidy of construction of film studios in the Commonwealth might lead to more investment than the existing credit, which instead tends to promote immediate short-term spending, and might promote creation of more permanent jobs in the Commonwealth at lower expense," the report said.
WBJ Web Partners
Most Recent
Most Recent
0 Comments