Business groups turning up the pressure for more tax relief

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Lots of business groups cheered when Democratic lawmakers and Gov. Maura Healey agreed to a roughly $1 billion tax relief package in October 2023, but there were still a few voices who suggested at the time that the measure did not go far enough.

Still craving relief nearly two years later, some of those same voices continue to ramp up the pressure on Beacon Hill to take additional action, even as state government grapples with the prospect of federal funding cuts and economic headwinds that could strain the budget.

The Pioneer Institute this morning rolled out a menu of corporate tax changes the think tank views as worth exploring, including elimination of the estate tax -- a levy that just got tweaked in the 2023 law -- and increased thresholds for application of the so-called sting tax.

Those ideas were presented not just as a wonky policy paper. Pioneer published them in a press release featuring quotes from the heads of the Massachusetts Restaurant Association and NFIB's Massachusetts chapter, a pair of influential organizations not shy about offering alternatives to the policies often embraced on Beacon Hill.

"The tax reform package adopted in 2023 did too little to move the needle for smaller businesses," said NFIB state director Chris Carlozzi, arguing that Pioneer's newest ideas "would make a difference for our members."

It's another piece of evidence that a segment of the state's corporate sector is ready to swing a little harder as debate swirls about how best to achieve the "affordability" and "competitiveness" that everyone says they want for Massachusetts.

Leaders of Pioneer this month joined with the head of the Massachusetts High Technology Council to propose ballot questions that would slash the state's income tax rate from 5% to 4% -- a change that could trim billions of dollars in revenues from the state budget, potentially imperiling programs and services -- and make the cap on allowable tax collections more likely to be triggered.

"Massachusetts is bleeding capital and talent while competitor states are adding hundreds of thousands of private sector jobs," Pioneer Institute Executive Director Jim Stergios said while rolling out the new study. "Every month we delay reform, the gap widens -- and the Commonwealth risks locking itself into long-term decline."

The fight will likely draw some pushback from groups that have achieved success at expanding, not shrinking, taxes in recent years, especially the Raise Up Coalition that secured voter approval of a surtax on high earners that's generated billions of dollars in new funding.

The prospect of reduced federal aid will also influence tax policy debates. American Federation of Teachers Massachusetts President Jessica Tang said this month that cutting the income tax "would result in stripping a lot of the services that we're trying to maintain." - Chris Lisinski

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