December 23, 2015

Massachusets Budget and Policy Center: Funding Improvements for Schools, Roads, and Public Transit with Tax Reforms that Improve Fairness

ITEP Work in Action

Our economic growth is not translating into significant economic progress for most of our people and this directly harms working families. The lack of more broadly shared economic progress also has harmed our state’s ability to make important investments that can make life better for working people. The highest income residents in Massachusetts, who have captured so much of the gains from our state’s economic growth over the last several decades, actually pay a smaller share of their income in state and local taxes than the rest of the population (see chart, below, and MassBudget’s factsheet, Examining Tax Fairness). When a large share of total income growth goes to the group that contributes the smallest share of their income in taxes, this means tax collections suffer – we wind up with less revenue to invest in schools, colleges, roads, bridges, buses and trains.  (Note: The “federal offset” – shown in the chart below – further reduces tax levels, particularly for higher income filers. A detailed discussion of the federal offset follows, below.)

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