We did it!
Being a skeptic, I'll wait until the legislature actually votes on it, but it sure looks like we've won:
Associated Press story on boston.com
House, Senate to cancel retroactive capital gains taxes
By Steve LeBlanc, Associated Press Writer | December 1, 2005
BOSTON --Taxpayers who've received notices to pay retroactive capital gains taxes from 2002 could soon be off the hook while thousands more will begin receiving rebates under a plan unveiled by House and Senate leaders on Thursday.
The proposal, detailed by Senate President Robert Travaglini and House Speaker Salvatore DiMasi, would pay up to $275 million in tax rebates over four years to those who paid capital gains taxes during the last eight months of 2002.
It would also absolve anyone from owing retroactive capital gains tax hikes from the first four months of that year.
"Anybody who got a retroactive notice is going to get another notice saying disregard the first notice," Travaglini said.
The proposal closely mirrors a plan floated by Gov. Mitt Romney two weeks ago and comes as lawmakers are under increasing pressure to fix the tax glitch without resorting to retroactive taxes.
Romney praised lawmakers, saying the decision will spare thousands of Massachusetts citizens unfair retroactive taxes.
"This is the right thing to do, and while it will cost the state some money, we can manage it," Romney said in a written statement.
The problem dates back to the state's most recent fiscal crisis, when lawmakers approved a capital gains hike set to begin in May 2002.
The state's top court struck down the tax, saying it was unconstitutional to create a new tax midway through the year. The court said the tax must go into effect either at the start of 2002 or 2003, but not in between.
Republicans lobbied for the tax to go into effect on Jan. 1, 2003, which would have given rebates to taxpayers who paid the tax on financial transactions, such as sales of stocks or real estate, in the last eight months of the year.
Instead, the Democrat-dominated Legislature made the tax go into effect on Jan. 1, 2002. As a result, some 48,000 taxpayers would have had to retroactively pay those taxes on transactions made during those four months, totaling some $200 million.
About $78 million of the estimate was owed by just 278 wealthy people, who would pay an average of $281,000 each. The average among the 48,000 taxpayers is about $4,200.
Democrats said they never intended a retroactive hike, but were forced into it when the court struck down their efforts to create a tax amnesty for the first four months of 2002.
Rank-and-file lawmakers said they had come under increasing pressure to cancel the retroactive taxes.
"In the end it wasn't liberal or conservative, Democrat or Republican, but everyone heard it so frequently and loud and clear," said Sen. Mark Montigny, D-New Bedford, who had argued against the tax. "Ultimately when people started to receive bills, the outcry was loud enough."
House Republican leader Brad Jones said the decision was a victory for taxpayers and the GOP, which had pushed to block the retroactive taxes.
"Do I think that the advocacy of the constituents and the citizens of the commonwealth and the near unanimity in the media had an influence on public policy? Yes, I do," said Jones, R-North Reading.
The Legislature had tried to soften the blow of the retroactive tax.
An $85 million tax loophole bill sent to Romney this week includes a provision that would have waived capital gains tax bills for less than $100, as well as penalties and interest. Romney amended the legislation with his proposal, and returned it to the Legislature.
At that point, lawmakers opted to agree with Romney's plan and abandon the retroactive taxes.
Paying the rebates over four years will mean a loss of revenue of between $56 and $69 million a year, according to Sen. Therese Murray, D-Plymouth, chairwoman of the Senate Ways and Means Committee.
Anyone owed $1,000 or less will get a one-time lump sum rebate, she said.
Associated Press story on boston.com
House, Senate to cancel retroactive capital gains taxes
By Steve LeBlanc, Associated Press Writer | December 1, 2005
BOSTON --Taxpayers who've received notices to pay retroactive capital gains taxes from 2002 could soon be off the hook while thousands more will begin receiving rebates under a plan unveiled by House and Senate leaders on Thursday.
The proposal, detailed by Senate President Robert Travaglini and House Speaker Salvatore DiMasi, would pay up to $275 million in tax rebates over four years to those who paid capital gains taxes during the last eight months of 2002.
It would also absolve anyone from owing retroactive capital gains tax hikes from the first four months of that year.
"Anybody who got a retroactive notice is going to get another notice saying disregard the first notice," Travaglini said.
The proposal closely mirrors a plan floated by Gov. Mitt Romney two weeks ago and comes as lawmakers are under increasing pressure to fix the tax glitch without resorting to retroactive taxes.
Romney praised lawmakers, saying the decision will spare thousands of Massachusetts citizens unfair retroactive taxes.
"This is the right thing to do, and while it will cost the state some money, we can manage it," Romney said in a written statement.
The problem dates back to the state's most recent fiscal crisis, when lawmakers approved a capital gains hike set to begin in May 2002.
The state's top court struck down the tax, saying it was unconstitutional to create a new tax midway through the year. The court said the tax must go into effect either at the start of 2002 or 2003, but not in between.
Republicans lobbied for the tax to go into effect on Jan. 1, 2003, which would have given rebates to taxpayers who paid the tax on financial transactions, such as sales of stocks or real estate, in the last eight months of the year.
Instead, the Democrat-dominated Legislature made the tax go into effect on Jan. 1, 2002. As a result, some 48,000 taxpayers would have had to retroactively pay those taxes on transactions made during those four months, totaling some $200 million.
About $78 million of the estimate was owed by just 278 wealthy people, who would pay an average of $281,000 each. The average among the 48,000 taxpayers is about $4,200.
Democrats said they never intended a retroactive hike, but were forced into it when the court struck down their efforts to create a tax amnesty for the first four months of 2002.
Rank-and-file lawmakers said they had come under increasing pressure to cancel the retroactive taxes.
"In the end it wasn't liberal or conservative, Democrat or Republican, but everyone heard it so frequently and loud and clear," said Sen. Mark Montigny, D-New Bedford, who had argued against the tax. "Ultimately when people started to receive bills, the outcry was loud enough."
House Republican leader Brad Jones said the decision was a victory for taxpayers and the GOP, which had pushed to block the retroactive taxes.
"Do I think that the advocacy of the constituents and the citizens of the commonwealth and the near unanimity in the media had an influence on public policy? Yes, I do," said Jones, R-North Reading.
The Legislature had tried to soften the blow of the retroactive tax.
An $85 million tax loophole bill sent to Romney this week includes a provision that would have waived capital gains tax bills for less than $100, as well as penalties and interest. Romney amended the legislation with his proposal, and returned it to the Legislature.
At that point, lawmakers opted to agree with Romney's plan and abandon the retroactive taxes.
Paying the rebates over four years will mean a loss of revenue of between $56 and $69 million a year, according to Sen. Therese Murray, D-Plymouth, chairwoman of the Senate Ways and Means Committee.
Anyone owed $1,000 or less will get a one-time lump sum rebate, she said.
posted by Irwin Jungreis at
9:38 PM
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