Massachusetts

GROUNDED MONKEYS: MILLIONAIRES UNLIKELY TO FLEE COMMONWEALTH IF RAISE UP MASS WINS TAX ON 1 PERCENT

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Image by Kent Buckley

December 8, 2015

BY JASON PRAMAS @JASONPRAMAS

Boston Business Journal’s Craig Douglas made an interesting criticism of Raise Up Massachusetts last week (“Excited about the proposed millionaires tax? Cut off your nose while you’re at it,” Dec. 4). For those who missed it, RUM is a progressive labor-community coalition that just collected over 155,000 signatures to field a constitutional amendment referendum in 2018 that will create an additional 4 percent income tax for residents who make more than $1 million a year.

RUM initially estimated that the new tax would generate $1.3 billion to $1.4 billion of new revenue a year if enacted in 2019. Then the state Department of Revenue recently did their own analysis, and projected that the additional revenue will be significantly higher—$1.6 billion to $2.2 billion a year.

This led BBJ’s Douglas to call foul on both the RUM numbers and the DoR numbers. The problem? BBJanalysis shows that projections by amendment advocates and the DoR aren’t taking into account that the number of Mass millionaires fell in 2013 and 2014—leading him to point out that the amount of tax money the amendment will raise could be far lower than expected.

Certainly food for thought. And if Douglas had stopped there he would probably have landed on solid ground. But then he overplayed his hand, arguing that if the amendment passes we can “expect more millionaires—and their earnings—to flee the state like a bunch of flying monkeys.”

That’s just a truism. The kind of spectre that anti-tax jihadis are fond of raising whenever there’s the slightest danger of tax equity in America. And Douglas offered no citation to back up the claim.

Turns out the Commonwealth’s very own UMass Amherst Political Economy Research Institute did a study called “Raising Revenue from High-Income Households: Should States Continue to Place the Lowest Tax Rates on Those with the Highest Incomes?” in 2012 that states “… the research reviewed in this study suggests that modest tax increases on affluent households are unlikely to make substantial changes in their work effort or entrepreneurship or make them any more likely to leave the state.”

Also, Douglas seems to have forgotten his own article from Oct. 22, “The BBJ Wealth Report: The towns and cities with the most millionaires,” in which he stated that the falling numbers of millionaires in the state were the result of rich people accelerating “income-related activities in 2011 and 2012 in anticipation of the pending rate hikes on high-income earners” and “deferred asset sales and related income-triggering events to avoid the higher rates, hoping instead for a more-favorable tax climate following the 2016 national elections.”

In other words, they played games to make sure that they could report as little income as possible after 2012. Nowhere did he say they left the state, however. Or even that they really lost money.

And that’s basically what I would expect rich people to do if the amendment passes. They’ll play games that allow them to report as little income as possible. Some will drop off the millionaire rolls for a time. But the state will gain a good chunk of desperately needed extra income we’re not getting from any of the various neoliberal shell games that legislators have been playing to avoid taxing the rich. The flying monkeys, meanwhile, will remain safely in their roosts.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

BARGAINING AGAINST OURSELVES: MEANS TESTING MBTA FARES WILL DECREASE PUBLIC SUPPORT FOR MASS TRANSIT

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Image by Kent Buckley

November 30, 2015

BY JASON PRAMAS @JASONPRAMAS

As the latest round of the ongoing neoliberal campaign to shift the cost of mass transit in Massachusetts from state government to individual riders gets in gear—a necessary step along the road to privatizing the MBTA—regular readers will be unsurprised to find that I am in agreement with progressive transportation advocates like Alternatives for Community and Environment that are against T fare hikesof any kind next year.

However, there is a related fare reform proposal being floated that also needs to be vigorously opposed early in the game: The idea of means testing T riders and giving poor people lower fares.

Supporters of the proposal include Monica Tibbits-Nutt and Brian Lang—two members of the powerful new MBTA Fiscal and Management Control Board that is tasked with bringing public transit costs to heel in the Bay State at a time when the T’s annual operating deficit is expected to rise from a projected $170 million this year to $240 million next year to $427 million by 2020. Transportation Secretary Stephanie Pollack has also voiced support for the idea.

I don’t doubt that Lang (president of Boston’s hotel and food service union UNITE HERE Local 26), Tibbits-Nutt (executive director of the 128 Business Council), and Pollack (former associate director for research at the Dukakis Center for Urban and Regional Policy at Northeastern University and onetime Conservation Law Foundation staffer) are well-meaning in their concern for low-income riders in the face of constant pressure for regular fare hikes.

But I think their push will create a two-tier system that undercuts the core principle of public services: universality. As the tremendous success of the Social Security program informs us, society as a whole does better when public services like mass transit contribute to the common good. If we start giving a better deal to one relatively powerless group like poor riders, then other more entitled groups like middle class riders will stop seeing support for the T as being in their best interest. Driving another nail in the coffin of the idea of public transportation as a human right and a critical public service when the governor’s seat is held by a Pioneer Institute privatizer like Charlie Baker and when a Democratic legislature has just suspended the anti-privatization Pacheco law for the T for the next three years.

Also, such a weak policy initiative can be undone as easily as it is enacted. Poor riders can have their discount taken away in a political heartbeat. And that’s the danger of mass transit advocates inside and outside government trying to forestall a necessary battle in the public interest with piecemeal reform. That’s the danger of hewing solely to politics of the “possible”—the politics of least resistance—and of buying into Maggie Thatcher’s dictum that “there is no alternative” to the neoliberal capitalist ideology. To forgetting about democracy. To absolving corporations and the rich of their responsibility to pay taxes, and privatizing government. Thus killing off public services while guaranteeing ever greater profits for the one percent.

Last spring, the Boston Globe‘s Shirley Leung predictably tried to put a positive spin on the means tested fare discount plan by inferring that it is somehow akin to progressive taxation—the opposite of Thatcher’s vision—where the poor pay a smaller percentage of their income in taxes and the wealthy pay a higher percentage. But while declaring that the single fare system is a regressive tax on the poor, she tripped lightly past the fact that if we had a genuinely progressive income tax in Massachusetts we’d not only have plenty of money to properly fund the T without regular fare hikes, but would also be able to significantly expand the system. And get all those suburban SUV cowboys and cowgirls on a public bus or train once in awhile—which would be good for both the environment and for reminding conservative suburbanites that they live in a democratic society. Not a Randian individualist dystopia.

The constitutional amendment campaign by the labor-backed Raise Up Massachusetts coalition would go part way towards that goal if enacted by raising state income tax on just the rich and by dedicating some of the funds to mass transit. Which is helpful. But, absent a public groundswell an order of magnitude larger than the Occupy movement, we’ll apparently have to wait for a progressive coalition with the political will to fight for a full progressive taxation amendment that will really solve the problem of properly funding public services like the MBTA.

Meanwhile, former Transportation Secretary James Aloisi (a sometimes controversial figure himself) amply demonstrates what could be done to save the T without major tax reforms in a recent article in Commonwealth—starting with forcing state government to take back the billions in “legacy” and Big Dig debt it dumped on the T years back, shifting up to 10 percent of highway dollars to mass transit each year for five years, and committing the billions in freed-up revenue toward desperately needed system maintenance.

Aloisi points out that the highest possible fare hikes under the law passed in 2013 that limits T fare hikes to 5 percent every two years would only result in an additional $20-23 million in new annual revenue when its operating deficit is rising and the bill for deferred maintenance—that will allow the system to reach a “state of good repair”—is $7 billion (and rising). And that even the 10 percent fare hike that some legislators insist the 2013 law allows would only bring in around $40 million in new annual revenue. So fare hikes are only going to alienate more people from the T in an era when it needs strong public support more than ever.

There’s lots more political drama to come over the next few months before anything is set in stone, but my general admonition to transportation activists would be to echo what a mentor of mine, longtime labor activist Tim Costello, told me over and over again in situations like this years before he passed away: “Don’t bargain against yourselves!”

In other words, mass transit advocates should not start the current fight with a weak political proposal like trying to give low-income T riders lower fares and exposing a lot of other better off—but still economically vulnerable—riders to a stiff hike. They should fight to defend and expand public transportation on democratic principle.

If it becomes necessary to make political accommodations along the way during the hard grassroots fight it will take to make that goal a political reality, then at least public transit advocates will be bargaining from a position of strength … and will end up winning more than they started with.

Rather than less.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

MASS BAIL REFORM NOW

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November 9, 2015

BY JASON PRAMAS @JASONPRAMAS

Lots of innocent people are spending time in jail in Massachusetts. And unsurprisingly many of those people are poor and a disproportionate number are people of color. But they are not convicted criminals. They are people who are charged with a crime—often a minor infraction—and can’t afford to pay the cash bail they’ve been assigned. So judges consign them to what to amounts to debtors’ prison while they await trial.

The number of people in the Commonwealth’s pretrial holding has grown nearly 13 percent since 2008, according to a recent study by MassINC, Exploring the Potential for Pretrial Innovation in Massachusetts, while “arrests have declined by 10 percent and the number of commitments annually to state prisons and county houses of correction has fallen by 22 percent.”

Although bail data are woefully scarce statewide, numbers released by the sheriffs in three Massachusetts counties are telling. The study shows that “Black residents are overrepresented in the pretrial population by a factor of 10 in Barnstable County. As a share of Franklin County’s jail population, the proportion of Black detainees is nine times higher than the share of Black residents in the general population; in Norfolk County, the disparity is a multiple of five.”

Furthermore, defendants of color face much higher bail. “In Barnstable County, the median bail amount for African-American defendants is four times higher than for white defendants. Median bail amounts for African-Americans in Berkshire County are five times higher than for white defendants.”

Clearly, the Commonwealth’s mostly white judges have some explaining to do.

Regardless, immediate reform is needed. Advocates are proposing a number of approaches to improve the system, but the one that will likely have the fastest effect is to significantly reduce the use of cash bail. Judges already have the ability to release people charged with a crime on their own recognizance until trial. And it would be good if they did that more often—especially for Black defendants that are currently being slammed with cash bail at a higher rate and for a larger amount than white defendants charged with the same crimes in the same jurisdictions. An even better option would be for Mass. courts to use unsecured bonds that only require a cash payment if a defendant fails to appear for court and abide by conditions of release.

Readers interested in getting involved in the campaign for bail and other pretrial reforms should check out the Pretrial Working Group and the Massachusetts Bail Fund. Those organizations are working on “An Act reforming pretrial process” (H.1584/S.802) that will introduce a raft of solid improvements to the Bay State’s bail system if enacted.

If you want to help affected folks right away, go to the Mass. Bail Fund website and donate whatever you can afford. They help defendants who owe $500 bail or less stay out of jail prior to trial by directly paying their bill. It’s a stopgap solution, but a necessary one until real bail reform gets passed.

The idea that defendants are innocent until proven guilty is enshrined in common law, in the US Constitution, and in the Universal Declaration of Human Rights. We cannot allow such a core democratic principle to be nullified for anyone in our society. Especially here in Massachusetts. So join the fight for bail reform now.

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director.

Why “Apparent Horizon”: This column explained

September 19, 2015

BY JASON PRAMAS @JASONPRAMAS

APPARENT HORIZON: Your Gateway to a Better Universe is the full title of my new column and it was inspired by a somewhat rarefied area of scientific inquiry. Current hypotheses in theoretical physics — notably one recently propounded by Stephen Hawking — discuss the region surrounding a black hole as an “apparent horizon.” Unlike the older model of black holes, Hawking et al propose that they do not contain infinitely dense singularities and that there are no sharp event horizons separating them from the rest of the universe. Matter (plus energy) is captured by the superdense gravity of a black hole, but its constituent information doesn’t make it inside. It stays in the apparent horizon in chaotic form. Where it remains until Hawking radiation, produced as the black hole slowly evaporates, carries it back to normal spacetime. Or possibly to another universe, since Hawking suggests that apparent horizons may be gateways to alternate universes. So this column functions as an apparent horizon for discussions of Boston politics, visual art and other topics of interest. Information gets chopped up, reordered and may transport the reader to another, hopefully better, universe of possibilities. Enjoy.

Apparent Horizon is the first column syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ network director.