Current Campaign: Massachusetts Business Owners and Executives in Support of Closing Tax Loopholes

We, the undersigned Massachusetts business owners and executives, support the following proposals to restore fairness to business taxation in the Commonwealth and to close abusive and expensive “tax loopholes.” We believe that shared prosperity depends on a robust and accountable public sector with the capacity to make investments in education, infrastructure and services that are essential to business productivity. We specifically refer to the provisions of the tax code which have created unintended corporate tax benefits for a small number of mostly large and sophisticated corporations doing business in the Commonwealth.

We are fortunate to live in a state that provides fertile ground for business and opportunity. Together we have built a robust market system, research and education institutions, and an infrastructure of technology, transportation, communications and public services that under gird our innovative and productive business sector. Continued progress depends upon maintaining and building upon our foundations of innovation, knowledge, education, public investment and supports.

We specifically support the following provisions of the tax code which have created unintended benefits to a small number of mostly large and sophisticated corporations doing business in the state:

  • “Check the Box” - Close the loophole that currently allows some businesses to designate themselves as a corporation at the federal level and avoid paying taxes by using a different designation like a “trust” for example at the state level. Forty – five other states have already closed this loophole.
  • “Combined Reporting” – Prevent multi-state companies from shifting income between subsidiaries in various states as a way to avoid state taxes. Twenty states have passed combined reporting laws.
  • “Telecom loophole” – Eliminate a 90 year old property tax exemption for phone companies first adopted as part of a government initiative to bring phones to everyone’s homes, when profits were regulated and there was only one phone company Bell Telephone.
  • “Insurance Company loophole” –Require businesses owned by insurance companies to pay the same taxes as other businesses.
  • “Deeds Excise loophole” – Close the loophole that allows companies to avoid paying the real estate transfer tax by creating a shell subsidiary which is given temporary ownership of the real estate, and sold rather than selling the real estate directly.

These loopholes have contributed to a dramatic decline in the percent of corporate profits subject to taxation, from 11.5 percent in 1989 to 5 percent in 2006. Implementing the “check the box” reform alone would generate $169 million in fiscal year 2009.

The form below is for current or retired business people to sign on to the statement.