Representative Don Humason



TAX LOOPHOLES? By Representative Don Humason, Jr. May 12, 2007 I would like to wish my mom and all moms a Happy Mother’s Day. Thanks to all you moms for all you do for us kids. The House and Senate met jointly this Wednesday for a Constitutional Convention that lasted approximately 60 seconds before Senate President Therese Murray gaveled it closed and recessed it until June 14. Then the House met to pass, finally, an Identity Theft bill, House 4012, an act relative to the Protection of Personal Information. It was a busy week in Westfield too. On Wednesday night there was a public hearing relating to the conversion to F-15 aircraft up at the 104th Fighter Wing at Barnes airport. I was there. It was very well attended and people asked a lot of good questions. I am hopeful they were pleased with the answers they received. On Friday we cut the ribbon for the new airport administration and terminal building up at Barnes. We also said goodbye to the Flight Deck Restaurant. And, of course, the city broke ground on the much anticipated Great River Bridge construction project. My constituents continue to contact me on issues of importance to them, from public higher education spending to local control of their pensions. I’ve also received a lot of mail concerning Governor Patrick’s well-meaning but in my opinion misguided effort to close corporate tax loopholes. Well, one person’s tax loophole is another person’s economic stimulus I was going to write my column on this issue, but my good friend from Sandwich, Representative Jeff Perry, beat me to it and wrote an excellent editorial. Instead of plagiarizing his words I asked Jeff if I could share his column with you and he said yes. So here it is: Some people would have you believe that we can solve all of our fiscal problems by increasing taxes on our businesses. In fact, Governor Patrick has filed a number of complex pieces of legislation to increase the taxes on various businesses. At the same time that some folks are suggesting increasing business taxes, Massachusetts finds itself 49th in the nation in job growth and we are one of just a handful of states where our population is declining. Thus while it may seem simple to raise taxes to increase spending for social programs, I remain concerned about what the economic impact will be, especially as it relates to job creation and the long term stability of State revenue. In general, State government seems to be sending conflicting messages to the business community. Just last year, the Legislature passed an “Economic Stimulus” package spending hundreds of millions of dollars to create targeted tax incentives; some might call these tax loopholes. Simply stated, within a few months, we passed a bill creating tax incentives for certain businesses and now we are talking about talking raising taxes on some of the very same businesses. This sends a disturbing and uncertain message to businesses who may be thinking about coming to the Commonwealth. One of the proposals by Governor Patrick, which I believe is extremely counterproductive would be to place a new tax on communications networks. While it may appear that this tax would create more income to the State, when asked in a committee hearing at the State House, the Governor’s staff admitted that there has not been a dynamic analysis on the long term net revenue to the State, nor what economic impact such a tax might have to the stability and growth of the industry. While no projection has been forthcoming from the corner office, according to some lobbyists at the State House, if the new tax passed, an estimated 2,200 jobs could be lost just in the telecommunications industry. I believe that our longstanding tax policy related to telecommunications encourages capital investment, and job growth in the communications industry has worked well. To demonstrate this, according to a recent Boston Globe piece, just last year, Verizon alone invested $600 million in Massachusetts to continue efforts to transform its network to a technologically advanced all-fiber network. At the same time, it generated $180 million in State and local taxes. Counting payroll for its 14,000 employees, pensions, healthcare costs, and almost $500 million spent with Massachusetts vendors, in 2006 Verizon alone poured over $2 billion into the State's economy. Together, the major carriers generated almost $500 million in State and local taxes last year, including $221 million in sales taxes that are not assessed on other companies. If we were to increase the taxes on such companies, what would happen to their ability to hire or retain employees as well as continue to invest to upgrade our technology? What would happen to the rates for consumers? While some want you to believe that we can lower our local property tax bills by increasing State taxes on businesses, I believe that view is shortsighted and often results in less revenue to the State and an overall negative business climate, which will result in the continued reliance on residential property tax payers. The bottom line is that when taxes are increased on businesses, they either choose to locate their operations elsewhere or consumers end up paying the price as businesses raise prices to cover the new taxes. Rather than simply viewing our businesses as a revenue source, we should do more to work with them, encouraging them to relocate and expand here in Massachusetts, which will create greater employment opportunities for our citizens and ultimately more revenue from the State. If we do not change our view, I am afraid we will continue to see more businesses leave Massachusetts and take good people with them. Representative Don Humason and his new aide Sarah Latour may be reached at their Westfield District office, 64 Noble Street, Westfield, MA 01085, 568-1366. Their Boston address is State House Room 542, Boston, MA 02133, (617) 722-2803. Email address: Rep.DonaldHumason@Hou.state.ma.us
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TAX LOOPHOLES?

By Representative Don Humason, Jr.

May 12, 2007

I would like to wish my mom and all moms a Happy Mother’s Day. Thanks to all you moms for all you do for us kids.

The House and Senate met jointly this Wednesday for a Constitutional Convention that lasted approximately 60 seconds before Senate President Therese Murray gaveled it closed and recessed it until June 14. Then the House met to pass, finally, an Identity Theft bill, House 4012, an act relative to the Protection of Personal Information.

It was a busy week in Westfield too. On Wednesday night there was a public hearing relating to the conversion to F-15 aircraft up at the 104th Fighter Wing at Barnes airport. I was there. It was very well attended and people asked a lot of good questions. I am hopeful they were pleased with the answers they received.

On Friday we cut the ribbon for the new airport administration and terminal building up at Barnes. We also said goodbye to the Flight Deck Restaurant. And, of course, the city broke ground on the much anticipated Great River Bridge construction project.

My constituents continue to contact me on issues of importance to them, from public higher education spending to local control of their pensions. I’ve also received a lot of mail concerning Governor Patrick’s well-meaning but in my opinion misguided effort to close corporate tax loopholes. Well, one person’s tax loophole is another person’s economic stimulus

I was going to write my column on this issue, but my good friend from Sandwich, Representative Jeff Perry, beat me to it and wrote an excellent editorial. Instead of plagiarizing his words I asked Jeff if I could share his column with you and he said yes. So here it is:

Some people would have you believe that we can solve all of our fiscal problems by increasing taxes on our businesses. In fact, Governor Patrick has filed a number of complex pieces of legislation to increase the taxes on various businesses.

At the same time that some folks are suggesting increasing business taxes, Massachusetts finds itself 49th in the nation in job growth and we are one of just a handful of states where our population is declining. Thus while it may seem simple to raise taxes to increase spending for social programs, I remain concerned about what the economic impact will be, especially as it relates to job creation and the long term stability of State revenue.

In general, State government seems to be sending conflicting messages to the business community. Just last year, the Legislature passed an “Economic Stimulus” package spending hundreds of millions of dollars to create targeted tax incentives; some might call these tax loopholes.

Simply stated, within a few months, we passed a bill creating tax incentives for certain businesses and now we are talking about talking raising taxes on some of the very same businesses. This sends a disturbing and uncertain message to businesses who may be thinking about coming to the Commonwealth.

One of the proposals by Governor Patrick, which I believe is extremely counterproductive would be to place a new tax on communications networks. While it may appear that this tax would create more income to the State, when asked in a committee hearing at the State House, the Governor’s staff admitted that there has not been a dynamic analysis on the long term net revenue to the State, nor what economic impact such a tax might have to the stability and growth of the industry.

While no projection has been forthcoming from the corner office, according to some lobbyists at the State House, if the new tax passed, an estimated 2,200 jobs could be lost just in the telecommunications industry. I believe that our longstanding tax policy related to telecommunications encourages capital investment, and job growth in the communications industry has worked well.

To demonstrate this, according to a recent Boston Globe piece, just last year, Verizon alone invested $600 million in Massachusetts to continue efforts to transform its network to a technologically advanced all-fiber network. At the same time, it generated $180 million in State and local taxes. Counting payroll for its 14,000 employees, pensions, healthcare costs, and almost $500 million spent with Massachusetts vendors, in 2006 Verizon alone poured over $2 billion into the State's economy.

Together, the major carriers generated almost $500 million in State and local taxes last year, including $221 million in sales taxes that are not assessed on other companies. If we were to increase the taxes on such companies, what would happen to their ability to hire or retain employees as well as continue to invest to upgrade our technology? What would happen to the rates for consumers?

While some want you to believe that we can lower our local property tax bills by increasing State taxes on businesses, I believe that view is shortsighted and often results in less revenue to the State and an overall negative business climate, which will result in the continued reliance on residential property tax payers.

The bottom line is that when taxes are increased on businesses, they either choose to locate their operations elsewhere or consumers end up paying the price as businesses raise prices to cover the new taxes.

Rather than simply viewing our businesses as a revenue source, we should do more to work with them, encouraging them to relocate and expand here in Massachusetts, which will create greater employment opportunities for our citizens and ultimately more revenue from the State.

If we do not change our view, I am afraid we will continue to see more businesses leave Massachusetts and take good people with them.

Representative Don Humason and his new aide Sarah Latour may be reached at their Westfield District office, 64 Noble Street, Westfield, MA 01085, 568-1366. Their Boston address is State House Room 542, Boston, MA 02133, (617) 722-2803. Email address: Rep.DonaldHumason@Hou.state.ma.us

This Site Designed and Maintained by: The Barre Group