Large corporations and their wealthy shareholders have used loopholes, tax breaks, and weak corporate disclosure laws to avoid paying their fair share of taxes for years. In the last four years alone, large corporations have received federal tax cuts worth billions of dollars a year in Massachusetts.
And during this economic crisis, many of these corporations have continued to generate enormous profits that flow to their extremely wealthy shareholders, even as most families are struggling just to get by. It’s time that they pay what they owe to support our economic recovery.
Raising progressive revenue to fund needed public goods—including public transit will — help prevent a long recession, fight inequality, and advance economic opportunity. Legislators should adopt policies that ask profitable corporations and their wealthy shareholders to do their part for our economic recovery.
- Increase The Tax Rate On Corporate Profits. Businesses that are turning a profit should be expected to contribute more to support the public goods on which their profits are based, especially during a public health and state fiscal crisis. Raising the current rate of 8% to the pre-2010 rate of 9.5% could generate $375 – $500 million annually from profitable businesses, even during a recession.
- Tax Profits Shifted Overseas by Increasing The Tax Rate On GILTI (Global Intangible Low Taxed Income). Many multinational corporations that do business in MA dodge taxes through accounting schemes that make their MA-based profits look like they were earned in offshore tax havens. This “income shifting” often places profits beyond the reach of US tax authorities. MA should follow many other states and match the federal provision that makes half of this income subject to tax. This could generate $200 – $400 million annually.
- Advance the Fair Share Amendment. The very wealthy can afford to contribute more to the public good. The Fair Share Amendment would create an additional tax of four percentage points on the portion of a person’s annual income above $1 million. The new revenue, approximately $2 billion a year, would be spent on quality public education and transportation, creating a new source of progressive funding for public transportation. This year, the Massachusetts Legislature must approve the Amendment at the Constitutional Convention, so it can move to the ballot in 2022.