Raise taxes for a fair recovery
We need more than Band-Aid federal, state solutions
THERE IS DANGER AHEAD as we move into the next phases of dealing with COVID-19. The public goods we rely on for our health care, to educate our young people, to ensure we have clean air and water, to support people when they need it most, and more — may be in jeopardy.
Right now, the Commonwealth is in a budgetary crisis. This at a time when we need real comprehensive relief for families and individuals, especially for our black and brown neighbors who have been hardest hit by the pandemic and recession. Yet, Beacon Hill lawmakers have not articulated a cohesive plan to ensure an equitable recovery. Instead, they have spent the last several months hoping for additional federal aid to fill the massive revenue shortfalls caused by the crisis.
While the CARES Act and accompanying federal legislation have provided some relief to select individuals and businesses, we need far more from Washington. This is true.
The latest set of federal executive orders offer no cohesive, long-term plan for getting our economy and society healthy and well. The Trump administration’s federal payroll tax deferral does little to provide actual relief for workers and employers who are struggling in this time. For those still employed, it simply postpones their payroll tax payments until the end of the year. As written, workers would end up having four months of payroll taxes taken out of their Christmas paychecks.
Now is the time to take the reins to determine our own destiny. All of us can call on the federal government to provide our people and state governments with financial supports, just as it did in the Great Recession. The Legislature has options: it can use our state’s multi-billion-dollar Rainy-Day Fund, take advantage of borrowing, or raise taxes by asking those who have benefited most from our economy to pay their fair share. By raising taxes on unearned income like dividends and capital gains, for instance, Massachusetts can ensure a fair and equitable recovery for black, brown, and other communities who have historically been left on the margins. We all should have the resources we need to participate in our recovery — that is equity.Government budgets are a statement of our collective priorities. Reducing inequality should be part of the economic calculus of how states and localities balance their budgets. This pandemic has shown how little cushion many of our communities of color and low-income people have to weather the economic slowdown. Without adequate revenue from the federal government and our wealthy neighbors and corporations, we can’t make the investments we need for a strong and equitable recovery.
Marie-Frances Rivera is the president of the Massachusetts Budget and Policy Center.