More press
State House News Service, 12/1: RETROACTIVE TAX HIKE TO BE NIXED, REBATES DELIVERED, LEGISLATIVE LEADERS SAY. The text is included in the comments to this post.
Boston Globe, 12/2: Lawmakers to rescind retroactive '02 tax bills
Boston Herald, 12/2: Oh, never mind: Pols to ax retro ’02 capital gains tax
MetroWest Daily News, 12/2: New plan cancels retroactive capital gains
The Boston Herald 12/2: Beacon Hill succumbs to common sense, by Howie Carr. The text is included in the comments to this post.
Boston Globe, 12/2: Lawmakers to rescind retroactive '02 tax bills
Boston Herald, 12/2: Oh, never mind: Pols to ax retro ’02 capital gains tax
MetroWest Daily News, 12/2: New plan cancels retroactive capital gains
The Boston Herald 12/2: Beacon Hill succumbs to common sense, by Howie Carr. The text is included in the comments to this post.
posted by Irwin Jungreis at
3:23 PM
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RETROACTIVE TAX HIKE TO BE NIXED, REBATES DELIVERED, LEGISLATIVE LEADERS SAY
By Michael P. Norton
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, DEC. 1, 2005…Memo to taxpayers: disregard any recent
notices to retroactively pay capital gains taxes.
House and Senate leaders announced Thursday afternoon they plan next week
to cancel a retroactive tax hike that they said was never their intent and
was forced on them by Supreme Judicial Court rulings that limited tax
policy decisions. The retroactive tax hike would affect 48,000 taxpayers
who earned profits on assets sold early in 2002.
Instead, the House and Senate plan to adopt an amendment similar to one
recommended by Gov. Mitt Romney that would cancel tax hikes on gains
realized between January and May of 2002 and rebate taxes paid on capital
gains realized between May and December 2002. About 157,000 taxpayers will
receive rebates, state officials say.
“It was just a matter of fairness and equity for us,” House Speaker
Salvatore DiMasi said during a meeting with reporters in Senate President
Robert Travaglini’s office.
Said Travaglini: “We have decided that we will not pursue any retroactive
collections of increased taxes and we will pay out over time the additional
dollars” to those who paid taxes that were later called into question by
the court. “Anybody who got a retroactive notice is going to get another
notice saying disregard the first notice.”
Department of Revenue spokesman Timothy Connolly, after the agreement was
announced, said: “We’ll stop sending out notices.”
The plans are a response to court rulings striking down the mid-year tax
increase and a second attempt to deliver tax amnesty to certain taxpayers
affected by the capital gains tax hike, which was originally approved to
help state government balance its books during the most recent fiscal crisis.
The agreement moves the tax increase effective date up to Jan. 1, 2003,
preventing the retroactive tax and satisfying a court mandate that
taxpayers be assessed equally in the same calendar year. It will require
the state to forego the collection of $150 million and to rebate between
$56 million and $69 million per year over the next four years.
The accord will require the unanimous consent of the Legislature, which is
meeting until January in informal sessions, where the objections of a
single member can stop the progress of any bill.
The rebates would be delivered over four years, rather than the three years
suggested by Romney, who was in California Thursday attending a Republican
Governors Association meetings.
In a statement released by his aides, Romney thanked and congratulated
legislative leaders “for acting to spare thousands of Massachusetts
citizens from the unfairness of retroactive taxation.”
“This is the right thing to do, and while it will cost the state some
money, we can manage it,” Romney added. “Far more costly in the long run
would have been the public’s loss of faith in their own government.”
Legislative leaders said the decision was fueled by several factors and
developments. The state’s improved fiscal condition is helping. Lawmakers
have received a stream of calls from taxpayers furious about being taxed
retroactively. And the idea of delivering rebates over years, rather than
a lump sum, appeared to be a deal maker.
According to DiMasi, lawmakers also want to advance to Romney a bill that
raises $84 million by closing loopholes corporations use to avoid paying
taxes. The capital gains compromise is part of that bill, which, under
legislative rules, would otherwise die at the end of December. “That was
another consideration,” DiMasi said.
Avoiding further litigation on the issue is also a goal of legislative
leaders, they said.
Senate Ways and Means Committee Chairwoman Therese Murray (D-Plymouth) said
the state’s improved fiscal condition made the capital gains decision
possible, but cautioned that November tax receipts, which showed no gain
over last November, are a sign that the economy here is only “chugging” along.
Tax collections five months into fiscal 2006 are running $218 million above
original budget benchmarks, according to the Department of Revenue, and 7
percent above actual collections during the same period in fiscal 2005.
Romney proposed his capital gains amendment compromise two weeks
ago. Legislative leaders told reporters today that they have been
privately discussing a solution for weeks.
Business leaders have mounted a campaign in recent weeks to cancel the
retroactive tax increase, which has been hotly debated, and largely
opposed, on the talk radio circuit.
“They deserve high praise for their action,” Massachusetts Taxpayers
Foundation President Michael Widmer said after the decision was
announced. “This was a problem not of anyone’s making and I think this is
a very fair resolution of a difficult issue.”
Asked if legislative leaders were contemplating a similar staggered,
multi-year rollback of the 5.3 percent income tax to 5 percent, as voters
have called for, Travaglini said “no.”
By
Irwin Jungreis, at 12/02/2005 3:40 PM
The Boston Herald
Friday, December 2, 2005
Beacon Hill succumbs to common sense
By Howie Carr
The Legislature finally did the right thing yesterday. All it took was turning the spotlight on them, thousands of irate phone calls and an incipient taxpayer revolt, and they suddenly decided to pull the plug on this newest retroactive tax increase.
Thanks, guys.
But the thing about this proposed hike in the 2002 capital-gains tax that was so aggravating — not to mention frightening — is that they have known about this problem since April, and they’ve been taking roll call votes to correct the situation since June, six of them in all, and the most votes the taxpayers could ever muster was 56 out of 160 members.
What changed, fellas?
If nobody had bitched and moaned, would it have been OK for the Department of Revenue to spend Thanksgiving week mailing out 48,000 capital-gains tax bills — for the year 2002.
And on top of charging you for a tax increase that didn’t exist when your capital gain occurred, the DOR added insult to injury by assessing you interest because somehow you didn’t have the good sense to pay a tax that didn’t exist at the time you cashed out some property or stock.
Of course, you’re lucky the reps didn’t hit you with a penalty on top of the interest.
I spoke to the son of an 81-year-old woman from Cambridge last night. She’d sold the family cottage in Hull for $75,000, and had been living on the proceeds of the sale. Then she got the letter — she owed $3,300.
"She was physically sick at the Thanksgiving dinner," her son John was saying last night. "And do you know when the payment was due? December 25."
Merry Christmas, Granny.
Welcome to Massachusetts, where the hacks’ motto is, What’s ours is ours and what’s yours is ours.
What happened was, in 2002, the Legislature decided to raise the capital-gains tax to deal with that year’s fiscal "crisis." The hike was effective May 1, 2002, but one affected taxpayer sued, and the SJC — who else? — ruled that it’s illegal to raise taxes in the middle of a year.
So the solons had a choice. Raise the taxes as of Jan. 1, 2003, or Jan. 1, 2002. Care to guess which way they went?
And the Legislature for months refused to cut the taxpayers any slack, even as they hoarded a $1.7 billion rainy-day fund, and as tax revenues for this year rose perhaps as much as $1 billion over estimates.
Oh sure, the solons offered a little something — very little. If you owed less than $100, they were willing to waive the bill. Thank you sir, may I have another?
It was so outrageous, even the bow-tied bumkissers of Morrissey Boulevard called for the Legislature to go along with what Gov. Romney wanted — a refund of the entire 2002 tax increase over three (now four) years.
Here are a few of the victims who called the governor’s office:
* An 85-year-old woman from Millis. Got a $10,000 tax bill.
* A man with a heart condition from Revere. When he received his $5,500 bill, he had to take a nitroglycerin pill.
* A woman in Bradenton, Fla. Sold her home on the Cape, now owes $23,000.
I got an e-mail from a constituent of Rep. George Peterson, the assistant Republican leader. This guy sold some inherited stock to pay for his son’s college education. The DOR now says he owes an extra $7,500 — plus, of course, interest of $1,400.
"How can they charge me three years of interest," this taxpayer asked, "on something I didn’t even owe until yesterday? What do they want me to do — tell my son I had to send his tuition money to 'Taxachusetts' so he can’t go to college this year?"
What do they care about your son, pal? Unless, of course, he’s an illegal alien.
By
Irwin Jungreis, at 12/02/2005 4:46 PM
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