Дзюндзя (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} syarzhuk) wrote,@ 2005-04-29 10:15:00 |
|
Весялуха
У 2002 годзе, калі ў штаце быў бюджэтны крызіс, кангрэс вырашыў падняць падаткі на capital gains, пачынаючы зь першага траўня. Народ падаў у суд, казаў, што падвышаць падаткі ў сярэдзіне года - неканстытуцыйна. Вышэйшы суд разглядзеў справу й сказаў - так, неканстытуцыйна. Таму большы падатак трэба ўвесьці ня 1 траўня, а 1 студзеня, што прынясе яшчэ болей грошай у бюджэт.
SJC ruling could raise gains tax for many
Lawmakers, Romney get choice on start date
By Scott S. Greenberger, Globe Staff | April 27, 2005
Unless the Legislature steps in, thousands of taxpayers will owe Massachusetts more in capital gains taxes on stocks and on certain real estate and businesses they sold during the first four months of 2002 under a ruling issued yesterday by the state's highest court.
The Supreme Judicial Court's decision gives Governor Mitt Romney and state lawmakers a choice: Either designate January 2002 as the effective date for a capital gains tax increase enacted three years ago and collect as much as $160 million in unpaid taxes or move the date back to January 2003 and refund as much as $275 million that has already been paid.
The controversy stems from the Legislature's decision in 2002 to raise capital gains taxes on May 1, 2002. Last year, the SJC found that tax increase to be unconstitutional, because tax rates must remain constant through a calendar year.
The ruling was issued in the middle of budget deliberations in the House, and the prospect of $160 million in newfound money is tempting for lawmakers who are interested in boosting spending on schools and social services.
Leading Democrats reacted cautiously yesterday to the choice between collecting more money with a surprise tax hike or creating a $275 million hole in the budget by mailing out refunds. But Romney immediately urged the Legislature to forgo the money by issuing 2005 tax credits to anyone who has to write a check to cover additional 2002 taxes.
Romney warned that if the state doesn't return the money, legislators will quickly spend it.
''Found money on Beacon Hill will evaporate faster than a drop of water on hot asphalt," said the Republican governor.
The 2002 tax increase on capital gains was adopted during the state's fiscal crisis, when Beacon Hill was desperate to raise more revenue. Lawmakers raised the tax rate on long-term capital gains to 5.3 percent, replacing six lower rates. Under the old system, the rates ranged from zero to 5 percent, based on how long the investor had held on to the asset before selling it. The state levied no tax on assets held longer than six years.
But in March 2003, about 100 investors filed a lawsuit challenging the constitutionality of a mid-year tax increase. A year ago the SJC ruled for the plaintiffs.
The court tapped Justice Martha B. Sosman to determine whether the state should make the new rate effective in January 2002 or January 2003.
According to the Department of Revenue, the first option would raise between $136 million and $168 million, including interest. The second would cost the state between $225 million and $275 million.
Before Sosman could issue her ruling, Beacon Hill came up with a third way under which no taxpayers would receive or owe any extra money: making the tax hike retroactive to January 2002, but granting a tax amnesty for the first four months of that year.
The plaintiffs objected to that plan, too. Yesterday the high court agreed with them, saying the amnesty did not pass constitutional muster. But it upheld the effective date of Jan. 1, 2002, so unless the Legislature acts, anyone who realized capital gains during the first four months of 2002 owes more money.
''The legal argument is done," said Stephen Schultz, the lawyer for the plaintiffs. ''It's now in the political arena, and everybody is going to have to pick a side."
The court said that the Legislature is free to move the effective date to Jan. 1, 2003. But the House budget already relies on $380 million from the state's reserves, and many lawmakers are trying to add spending, so the Legislature is unlikely to choose that option, because it would drain millions from the state budget. Even Romney, who called for the refund last year, is no longer advocating that position.
Instead, the governor says, he will direct the Department of Revenue to issue tax bills to people who owe more for 2002 and then give the same people 2005 tax credits that cover those payments, plus interest.
Revenue Commissioner Alan LeBovidge said the agency anticipated yesterday's decision and has already begun the process of reviewing 2002 returns to determine who owes more money and how much.
Even though taxpayers will not be affected financially if his plan is adopted, Romney said, they will have to go through the hassle of paying taxes on transactions that occurred three years ago.
LeBovidge said he is confident his agency can track down the taxpayers, even those who have left the state. Taxpayers who have died and transferred their assets to relatives will create another vexing problem.
But Representative J. James Marzilli Jr., the Arlington Democrat who came up with the amnesty compromise that the court rejected yesterday, said Romney's plan ''runs directly afoul of the Supreme Judicial Court's ruling."
Marzilli said Romney's plan will run into the same constitutional problem his amnesty plan encountered, because it treats a certain group of taxpayers differently than another group of taxpayers.
"It's nice grandstanding for a politician, but it doesn't pass the constitutional test," Marzilli said.
Despite Romney's assertion that lawmakers are eager to spend the new money, the chairman of the House Ways and Means Committee sent a letter to his colleagues late yesterday urging caution.
Representative Robert A. DeLeo, Democrat of Winthrop, warned legislators that ''we do not have a clear handle on the actual amount of revenue that will be raised as a result of the decision."
He also pointed out that any new money the state collects as a result of the SJC's ruling should not be used to pay for recurring expenses.
"It is fiscally unwise and dangerous to use one-time revenues to support annual appropriations," DeLeo said.
Instead, Marzilli suggested, the Legislature would spend the money on capital projects or put it in the state's reserves.
Scott Greenberger can be reached at greenberger@globe.com.
© Copyright 2005 Globe Newspaper Company.
У 2002 годзе, калі ў штаце быў бюджэтны крызіс, кангрэс вырашыў падняць падаткі на capital gains, пачынаючы зь першага траўня. Народ падаў у суд, казаў, што падвышаць падаткі ў сярэдзіне года - неканстытуцыйна. Вышэйшы суд разглядзеў справу й сказаў - так, неканстытуцыйна. Таму большы падатак трэба ўвесьці ня 1 траўня, а 1 студзеня, што прынясе яшчэ болей грошай у бюджэт.
SJC ruling could raise gains tax for many
Lawmakers, Romney get choice on start date
By Scott S. Greenberger, Globe Staff | April 27, 2005
Unless the Legislature steps in, thousands of taxpayers will owe Massachusetts more in capital gains taxes on stocks and on certain real estate and businesses they sold during the first four months of 2002 under a ruling issued yesterday by the state's highest court.
The Supreme Judicial Court's decision gives Governor Mitt Romney and state lawmakers a choice: Either designate January 2002 as the effective date for a capital gains tax increase enacted three years ago and collect as much as $160 million in unpaid taxes or move the date back to January 2003 and refund as much as $275 million that has already been paid.
The controversy stems from the Legislature's decision in 2002 to raise capital gains taxes on May 1, 2002. Last year, the SJC found that tax increase to be unconstitutional, because tax rates must remain constant through a calendar year.
The ruling was issued in the middle of budget deliberations in the House, and the prospect of $160 million in newfound money is tempting for lawmakers who are interested in boosting spending on schools and social services.
Leading Democrats reacted cautiously yesterday to the choice between collecting more money with a surprise tax hike or creating a $275 million hole in the budget by mailing out refunds. But Romney immediately urged the Legislature to forgo the money by issuing 2005 tax credits to anyone who has to write a check to cover additional 2002 taxes.
Romney warned that if the state doesn't return the money, legislators will quickly spend it.
''Found money on Beacon Hill will evaporate faster than a drop of water on hot asphalt," said the Republican governor.
The 2002 tax increase on capital gains was adopted during the state's fiscal crisis, when Beacon Hill was desperate to raise more revenue. Lawmakers raised the tax rate on long-term capital gains to 5.3 percent, replacing six lower rates. Under the old system, the rates ranged from zero to 5 percent, based on how long the investor had held on to the asset before selling it. The state levied no tax on assets held longer than six years.
But in March 2003, about 100 investors filed a lawsuit challenging the constitutionality of a mid-year tax increase. A year ago the SJC ruled for the plaintiffs.
The court tapped Justice Martha B. Sosman to determine whether the state should make the new rate effective in January 2002 or January 2003.
According to the Department of Revenue, the first option would raise between $136 million and $168 million, including interest. The second would cost the state between $225 million and $275 million.
Before Sosman could issue her ruling, Beacon Hill came up with a third way under which no taxpayers would receive or owe any extra money: making the tax hike retroactive to January 2002, but granting a tax amnesty for the first four months of that year.
The plaintiffs objected to that plan, too. Yesterday the high court agreed with them, saying the amnesty did not pass constitutional muster. But it upheld the effective date of Jan. 1, 2002, so unless the Legislature acts, anyone who realized capital gains during the first four months of 2002 owes more money.
''The legal argument is done," said Stephen Schultz, the lawyer for the plaintiffs. ''It's now in the political arena, and everybody is going to have to pick a side."
The court said that the Legislature is free to move the effective date to Jan. 1, 2003. But the House budget already relies on $380 million from the state's reserves, and many lawmakers are trying to add spending, so the Legislature is unlikely to choose that option, because it would drain millions from the state budget. Even Romney, who called for the refund last year, is no longer advocating that position.
Instead, the governor says, he will direct the Department of Revenue to issue tax bills to people who owe more for 2002 and then give the same people 2005 tax credits that cover those payments, plus interest.
Revenue Commissioner Alan LeBovidge said the agency anticipated yesterday's decision and has already begun the process of reviewing 2002 returns to determine who owes more money and how much.
Even though taxpayers will not be affected financially if his plan is adopted, Romney said, they will have to go through the hassle of paying taxes on transactions that occurred three years ago.
LeBovidge said he is confident his agency can track down the taxpayers, even those who have left the state. Taxpayers who have died and transferred their assets to relatives will create another vexing problem.
But Representative J. James Marzilli Jr., the Arlington Democrat who came up with the amnesty compromise that the court rejected yesterday, said Romney's plan ''runs directly afoul of the Supreme Judicial Court's ruling."
Marzilli said Romney's plan will run into the same constitutional problem his amnesty plan encountered, because it treats a certain group of taxpayers differently than another group of taxpayers.
"It's nice grandstanding for a politician, but it doesn't pass the constitutional test," Marzilli said.
Despite Romney's assertion that lawmakers are eager to spend the new money, the chairman of the House Ways and Means Committee sent a letter to his colleagues late yesterday urging caution.
Representative Robert A. DeLeo, Democrat of Winthrop, warned legislators that ''we do not have a clear handle on the actual amount of revenue that will be raised as a result of the decision."
He also pointed out that any new money the state collects as a result of the SJC's ruling should not be used to pay for recurring expenses.
"It is fiscally unwise and dangerous to use one-time revenues to support annual appropriations," DeLeo said.
Instead, Marzilli suggested, the Legislature would spend the money on capital projects or put it in the state's reserves.
Scott Greenberger can be reached at greenberger@globe.com.
© Copyright 2005 Globe Newspaper Company.
