Pignatelli and Kaufman conduct forum on tax policy

LENOX – Rep. William “Smitty” Pignatelli (D-Lenox) hosted Rep. Jay R. Kaufman (D-Lexington) at Lenox Town Hall on October 12 for a forum on tax policy and revenue in the State of Massachusetts.

Rep. Kaufman is the co-chairman of the joint committee on revenue and has held this position since 2009.

Rep. Pignatelli accepted Rep. Kaufman’s offer to come to the 4th Berkshire District to discuss the State of Massachusetts’ tax code and the revenues it generates.

When going over the elements of a good tax policy, Rep. Kaufman addressed the topics of Adequacy, Fairness/Equity, Certainty/Stability, Congruency with Policy Goals, Responsibilities and Authority Aligned, Simplicity, Efficiency (Administrative and Economic) and Transparency.

“For all the talk that we are a very progressive state, our tax system is regressive,” he said, noting the lowest 20 percent of Massachusetts taxpayers paid the highest percentage of their income in state taxes, while the top one percent paid the lowest percentage of their income.

One of the reasons for this, Rep. Kaufman pointed out, is Massachusetts has a constitutionally-mandated flat tax.

He also noted Massachusetts’ high tax expenditure budget. Massachusetts gives out exemptions, exceptions and deductions expected to result in over $26 billion in lost revenue in 2013. Massachusetts is projected to collect $22 billion in taxes during this same time period, $4 billion less than the amount of revenue it’s choosing to forego.

Rep. Kaufman talked about the difficulty of reforming the tax expenditure system and how many of the elements within it have powerful lobbying groups defending them, but cited the need for reform in the system nonetheless.

“The committee has not authorized a single new tax expenditure since I became chair,” he said, noting a few were passed over his objections in the budget this year, although the governor vetoed most of them.

Rep. Kaufman said there would be a series of public hearings around the state in the spring to get public input on how to reform the tax system.

“I’m betting the farm that we can have that conversation,” he said.

Rep. Pignatelli and Rep. Kaufman then discussed tax policy amongst themselves and with the audience.

“I think we need to look at things rurally vs. urban,” said Rep. Pignatelli, adding he felt small towns didn’t get enough attention from the state.

“I think you can only fix [the tax code] in a big kind of way,” said Rep. Kaufman, who added raising the income tax or the gas tax were the only two ways that a substantial amount of new revenue could be generated.

Rep. Pignatelli said that he opposed raising the gas tax as it was currently structured, but would be open to it if some of the money raised from the gas tax stayed in the areas where it was generated. This would be significant because rural western Massachusetts relies far more on cars than most other parts of the state.

Other possible reforms, which Rep. Kaufman floated, involved taxing services and luxury items, such as tickets for events and memberships in golf clubs.

He also brought up a proposal that would exempt the first $40,000 of income from the state income tax. This raising of the exemption, from its current level of $4,400 for an individual, would also be tied to increasing the state’s income tax.

“For the vast majority of the people in the commonwealth it would not represent a tax increase, but boy would it sound like a tax increase when it was announced,” said Rep. Kaufman, speaking of the challenge of selling such a plan.

He also talked about the difficulty of amending the constitution to allow the state to institute a progressive income tax, a proposal that both he and Rep. Pignatelli support.

“It’s been tried five times in the last two generations, it has never gotten more than one vote in three,” said Rep. Kaufman. “Quite frankly….I don’t think we can do the kind of fundamental systemic fix (to the tax code) without that constitutional amendment.”

Rep. Kaufman was well-received by the small crowd in attendance, most of whom were government officials from towns in the 4th Berkshire District invited by Rep. Pignatelli.

“I think this is a conversation that really has to come forth,” said Julie Hanum, a selectwoman from Sheffield who attended the event. “I commend Smitty and his colleague Jay Kaufman for trying to tackle this kind of issue.”

“It’s my hope that by the time we enact a new budget…effective July 1, that we will have fixed some of the holes in our taxes,” said Rep. Kaufman, who added Rep. Pignatelli had been a long-time ally on these issues.

“It was awesome,” said Rep. Pignatelli, when asked by The Beacon on his thoughts about the event. “Hopefully we can build some momentum.”

Posted by Bera B. Dunau on October 25, 2012. Filed under Community News,News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry