Look Into Corporate Tax Subsidies and Loopholes Before 9C Cuts

Statement by Nathan Proctor, State Director of Massachusetts Fair Share. Contact at 203-522-3860. 

"Facing yet another revenue shortfall and unexpected cuts, lawmakers have difficult decisions to make. But among them is an easy one: let's address the rising cost of corporate tax subsidies and tax loopholes.

"Today, the Massachusetts Budget and Policy Center released a new study which details how the cost to the state from special business tax break spending has nearly tripled since 1996. Adjusting for inflation, the price tag has skyrocketed from $370 million in 1996 to over $1 billion in the current fiscal year. Much of these tax breaks occur with no accountability to make sure that this money is being spent wisely.

"We also know that offshore tax loopholes put a further drain on the state budget, by allowing companies to book profits to offshore tax havens and avoid taxes.

"As corporate tax subsidies increase, that income has to come from somewhere. Will it be funding early education? Will we continue to underfund public transportation? We have real issues to address in the state and we can't afford to allow $1 billion in subsidies with hardly any accountability.

"The public has a right to know where this money is going and whether its an effective and efficient use of our dollars. Before we cut critical programs like early education or transportation we should make sure that our corporate tax expenditures offer a meaningful public benefit to the people of Massachusetts.

"We can also lessen the budget shortfall by closing loopholes. We can close a loophole that allows companies to hide profits in places like the Cayman Islands that levy little to no tax. Local businesses aren’t setting up foreign subsidiaries to skirt tax codes, they’re paying their fair share for the services we all benefit from.

"If we want to make progress as a state everyone needs to do their part. It's time for our lawmakers at every level to get serious about corporate tax breaks and corporate tax loopholes."