pdf of revenue overview

8/8/2019 PDF of Revenue Overview

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State & Local Taxes in Massachusetts

Representative Jay R. Kaufman Senator Benjamin B. Downing

House Chair Senate Chair


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Source: FY 2008 Massachusetts State & Local Revenue, US Census Bureau

Property Tax,35.3%

Personal Income,

36.8%

Sales Tax,

13.1%

Excise Taxes,

6.8%

Corporate Income,

6.4%

Other Taxes, 4.2%

State & Local Revenue Sources

Property TaxPersonal Income

Sales Tax

Excise Taxes

Corporate Income

Other Taxes


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Source: Executive Office of Administration & Finance, FY 2008


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Adequacy Fairness/Equity Certainty/Stability Congruency with Policy Goals Responsibilities and Authority Aligned Simplicity

Efficiency (Administrative and Economic)

Transparency


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Adequacy Fairness/Equity Certainty/Stability Congruency with Policy Goals Responsibilities and Authority Aligned Simplicity Efficiency (Administrative and Economic)

Transparency


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Source: Massachusetts Budget & Policy Center

Fiscal Year 1977-78 State & Local Taxes as a % of Personal Income

U.S.

11.2%

MA

13.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

NYAKMACAWYMNWIVTAZHI

NMMEMT RI

MDUSMIDENJWNEPALAORCOUTKSWVNVMSCTILK

YIASDSCIDN

DGANCVAOKTNINN

HFLARTXMOOHAL

%ofPersonalIncome


7/22Source: Massachusetts Budget & Policy Center

Fiscal Year 2007 State & Local Taxes as a % of Personal Income


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Income Tax Long Term Capital Gains Tax - $188 million Earned Income Tax Credit - $112 million Reduction of dividend/interest income from 12% to 5.3% - $629 million Increased Personal Exemption - $614 million Senior Circuit Breaker - $60 million

Corporate Excise Research Tax Credit - $70 million Mutual Fund Apportionment Formula - $129 million Film Tax Credit - $125 million Corporate / Bank Tax Rate Reductions - $51 million

Sales Tax Internet Access Exemption - $115 million

Source: Massachusetts Department of Revenue, 2010


9/22Source: Massachusetts Budget & Policy Center

0%

1%

2%

3%

4%

5%

6%

7%

FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08

%TaPsonome

Sales Tax ($1.0B)Corporate Tax ($332m)Other Taxes ($500m)

Income Tax ($1.4b)


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Adequacy Fairness/Equity Certainty/Stability Congruency with Policy Goals Responsibilities and Authority Aligned

Simplicity Efficiency (Administrative and Economic)

Transparency


11/22Source: Institute for Taxation & Economic Policy, 2009

2007 State & Local TaxesShares of Family Income

IncomeRanges Less than$18,000 $18,000 to$34,000 $34,000 to$58,000 $58,000 to$97,000 $97,000 to$203,000 $203,000 to$526,000 $526,000 ormoreTop 20 %


12/22Source: Massachusetts Budget & Policy Center, 2010

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

PropertyTaxesas

APercentofPersonalIncome

Note: FY 2001 and FY 2008 are both years that were at the leading edge of prolonged economic downturns.Using these data allows for a more appropriate, apples-to-apples comparison of change over time.


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Transparency


14/22Source: Massachusetts Taxpayers Foundation

* 2009 & 2010 Estimates Executive Office of Administration & Finance

Capital Gains Revenue FY 2000 to FY 2010


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Transparency


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Transparency


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Adequacy Fairness/Equity Certainty/Stability Congruency with Policy Goals Responsibilities and Authority Aligned Simplicity Efficiency (Administrative and Economic)

Transparency


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Source: Massachusetts Department of Revenue, 2010

Sample Tax ExpendituresIncome Tax

Non-taxation of capital gains at death $ 325.8 million Exemption of Interest on Savings in Massachusetts Banks $ 9.3 million

Corporate Excise Investment Tax Credit $50.4 million Exemption for property subject to local taxation $ 135.7 million

Sales Tax Sales tax exemption on gasoline $ 570.7 million Sales tax exemption on food $587.6 million


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Simplicity Efficiency (Administrative and Economic) Transparency


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Assessing Value What is the public policy goal? What metrics/criteria are to be used in evaluating efficacy/outcomes? What is the anticipated revenue impact? What is the advisability (and feasibility) of a clawback provision?

(previously given monies or benefits that are taken back if targets

are not met and/or conditions satisfied)

How frequently should the tax expenditure budget be reviewedand/or reconsidered?

What is the advisability of a sunset provision?


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Transparency


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