Tax & Budget In the News

THE OCT. 13 article “Business tax deal may cost $535m’’ (Page A1) is a perfect illustration of why corporate tax breaks must be transparent. Through the tax code, the Legislature gave $535 million to some businesses in the state. Yet the public, including members of the Legislature, has no idea which corporations reap the rewards, how much they benefit, or whether the companies contribute at all to the local tax base. We know only that the biggest benefit goes to a handful of nameless companies.

Tax credits and special deductions have the same bottom-line effect on the budget as a public grant. When the state loses this revenue, it affects how much the rest of us pay in taxes. If the state reacts by reducing local aid, local communities often reduce services, raise property taxes, or both.

Failure to disclose the recipients hampers lawmakers’ and the public’s ability to assess the value of the deduction. Applying for a tax break is not mandatory. Any company opposed to disclosure need not apply.

Deirdre Cummings
Boston
The writer is budget and tax policy director for MASSPIRG.