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.

Share Your Story!

The effect on public opinion when you tell about your own experiences with the Retroactive Tax should not be underestimated.

The consensus among all the lobbyists, news reporters, lawyers, and politicians we talk with is that the negative impact on your life and that of your family will be the key factor in how legislators respond to the Governor’s amendment to the Retroactive Tax Bill.

Here’s why: A growing number of newspapers, including the Globe, Herald, MetroWest Daily News, Worcester Telegram & Gazette, and Lawrence Eagle Tribune and its allied publications on the North Shore and Western Mass have taken a clear position in favor of passing the Governor’s amendment.

But the legislators whose votes will determine the outcome of the issue still don’t have a clear idea of the financial turmoil and emotional pain you are experiencing now that you have received your Retroactive Tax bill.

If you really want to make a difference, both on your own behalf and that of the family and loved ones you have worked for all your life, it’s time to reach out and make your voice heard. Here’s how:

If you feel confident about talking directly to the media, call the newspapers you regularly read and the radio and television stations you listen to and watch. Your right to free speech is protected under the Constitution and no one can do anything to stop you from expressing your opinion.

Letters to the editor can make a real difference, too. Remember to include your full name and phone number at the bottom of letters, even if you request that your name be withheld for reasons of privacy. Papers need to be able to check your story for reasons of veracity, but almost always will protect your privacy in personal matters.

I’ll post a roster of newsroom and producers’ phone numbers in a day or two, but don’t be afraid to call or write on your own, right now. Some people are saying that this whole unfortunate matter can be constructively resolved in the next few weeks and perhaps soon after the turn of the year if those affected speak out right now.

Call and write your legislators, too. Elsewhere on this blog there’s a link to help your find your legislators’ names and contact information. Or call your town or city clerk and tell them your street address. They’ll be able to tell you the names of your representative and senator.

If you need help in telling your story, or just want to talk about where and how to send it, drop an email to petewrites@aol.com. You’ll receive prompt, courteous attention in complete confidence from Peter Golden, who handles our media relations.

Also, when you share your story directly with us, we can bring it to the attention of legislators other than your own. I’ve been told that stories like yours, because they are authentic and come straight from the heart, are a vital element in the campaign to achieve a compromise on the Retroactive Tax issue.

Based on what I’ve heard so far, there are three or four shared scenarios that many of us are experiencing. Each is no less compelling than the other, but when told through your voice becomes even more so, because in your relating it, the story assumes a human dimension that is unique unto itself.

Please allow me to relate some of the “horror stories” I am encountering in the hope they will encourage you to share yours, as well. Remember, these are real people whose pain is no less genuine than yours or mine. They should not be subjected to the abuse they are experiencing, and neither should you.

Here are a few:

• Hundreds of elderly people in a new retirement community in Peabody sold their homes or other substantial assets in 2002 in order to pay the entry fee for their new community. On one entryway alone our contact tells us Retroactive Tax bills range from $8000 to $28000! Think about what that’s doing to those people, the hundreds more living in the complex, and the thousands of elderly people across Massachusetts who must be experiencing similar anxiety and worry as they struggle to come to terms with this brutally unfair burden. Now think about your own situation and the importance of joining the struggle by making your voice heard.

• I’ve also heard about people who sold stock in 2002 to finance college tuitions for their children. Imagine, you work all your adult years to ensure the future of your child and the Legislature wants to tax you twice for an act of loving kindness.

• I’m be re-taxed myself for having the temerity to succeed in business after taking enormous risks with my partners and colleagues. How many of you sold a business in 2002 after years or even decades of hard work and struggle?

• But the story that still lingers longest in my mind is one we read in a letter to the editor prior to its submission to a South Shore paper. In an e-mail from an agonized son describing the travails of his elderly mother, we heard of a woman who is confined to a nursing home after having sold her primary residence and is faced with bankruptcy when she is old and infirm.

I think its high time the public and by association the members of the Massachusetts House and Senate heard the havoc their Retroactive Capital Gains Tax is causing in the lives of honest, tax-paying citizens like you.

Call people, email them, write notes and letters, and get in touch with Peter Golden at petewrites@aol.com; now’s the time to spread the word, now’s the time to act on your own behalf!

What can we do?

Based on the current political situation there is a good chance that the retroactive tax increase can be reversed if there is enough of a backlash.

If each of us does all of the following it will have a huge impact:

1) Call, visit, and write to your State Representative and Senator. Also have your spouse do all of the above.

Here is a list of legislators by city or town. It also includes links to the legislator’s web site which has phone number, address, and other information. If there are several for your city or town and you aren’t sure which precinct you’re in, you can call your town clerk to find out. Or, follow the instructions here to find out using your street address.

Make sure to say that you are in favor of repealing the retroactive capital gains tax, and you support the Governor’s amendment to HB 4169. The Citizens Against Retroactive Taxation web site www.noretrotax.org has a lot of good information about what to say when you call and how to get your legislator to respond. I recommend it.

Follow up phone calls with a written letter. Here is a link to proper form when writing letters to legislators.

2) Make your opinion and situation known to the media. Write letters to the Boston Globe, the Boston Herald, all of your local papers, and any other media outlets you can think of. Also call in to talk radio.

Letters to the Globe must be 200 words or less and can be submitted using this form.

Letters to the Herald can be emailed to oped@bostonherald.com and should include name, full address, and phone number (only name and town are published -- the rest is for verification).

3) Contact everyone you know who might be affected by this tax or who might be sympathetic. Encourage them to do all of the above actions and visit this BLOG for updates.