Ben Downing: Income Tax Cuts Make Us Weaker

Recently, Governor Charlie Baker celebrated the decline of Massachusetts income tax to 5%. Twenty years ago, Massachusetts taxed income at 5.95%. Through ballot initiative and legislative compromises, over time it dropped to the current rate. Unfortunately, neither the final reduction, nor the total decrease, will make Massachusetts fairer or stronger. Rather, the reduction of the fairest statewide tax benefits the top 1% of earners and makes it that much harder for the rest to prosper. The reduction in the income tax hampers our ability to make investments needed to reduce inequality, combat climate change and revitalize economies outside of Greater Boston. It might look like good politics, but it’s bad policy and all of Massachusetts is weaker for it.

We are all weaker because 25% of the benefit of the income tax cuts flow to the top 1% of earners. The same earners, according to the Economic Policy Institute, have captured 58% of all income growth since the Great Recession. Precisely at the time we should all be paying our fair share to ensure broad prosperity, we are amplifying inequality. We are amplifying inequality by handing tax cuts to the wealthy and by limiting the state’s ability to make investments that would lift residents out of poverty, while growing and strengthening the middle class. The inability to invest can be seen and felt across Massachusetts and we are weaker for it.

We are all weaker because, adjusted for inflation, our statewide investment in public higher education is lower than it was 20 years ago. The value of public higher education has not dropped in 20 years. The cost of higher education has not dropped in 20 years. The importance of higher education has not declined in 20 years. The only thing that has changed is Massachusetts’ ability to fund public higher education. We have prioritized tax cuts that disproportionately benefit the wealthy and asked students at Berkshire Community College, MCLA, UMass Amherst and the 26 other campuses to take on more debt.

We are all weaker because, adjusted for inflation, our statewide investment in transportation is barely above what it was 20 years ago. Instead of promoting transit to reduce climate emissions, help working families and the middle class and enhance quality of life, our transportation and development decisions have pushed more people into cars and created the worst congestion in the country. Fares are up, drive time is up, emissions are up and air quality and our overall quality of life is down. We have prioritized tax cuts for those whose incomes are growing, while asking everyone else to fund a crumbling status quo.

We are all weaker because, adjusted for inflation, our statewide investment in economic development is significantly below what it was 20 years ago. Instead of heeding the call from MassINC and others to invest in revitalizing our Gateway Cities and other regions outside of Boston, we have pared back. State investment in communities like Pittsfield, North Adams, Holyoke, New Bedford, and others of their like could relieve development pressure from Boston’s housing market and infrastructure. Instead of taking this long-term view, we have succumbed to the short-term allure of tax cuts and trickledown economics.

The income tax reduction is short sighted and political. It short changes our quality of lives immediately, disproportionately benefits the wealthy and sets up future generations for a harder struggle. We would all love to have a lower income tax, but given the choice I’d far rather have a state where inequality is declining, where higher education is accessible to all and where our transit system is an asset. That would make Massachusetts fairer and stronger and that should be our goal.

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