NEWS RELEASE
Contact Erin Murphy, 617-557-7324
MARCH 2, 2010
GREATER BOSTON CHAMBER LAUNCHES PLAN TO SPUR THE MASSACHUSETTS ECONOMY, GROW 35,000 - 40,000 JOBS
“Renew the Massachusetts Economy” Platform Would Help Employers Invest, Expand, Innovate & Hire – Right Here in the Commonwealth
With the goal of spurring job creation and economic recovery in the Commonwealth, the Greater Boston Chamber today launched a recovery platform to strengthen Massachusetts’ competiveness. “Renew the Massachusetts Economy,” or “Renew Mass,” is a two-year initiative, timed to coincide with the 2010 election year and the 2011/2012 legislative session. The Chamber will promote this platform to the state’s candidates for elected office, and looks forward to discussing
these and other proposals that will lower business costs and make Massachusetts more competitive.
The “Renew Mass” platform consists of four tax proposals designed to help employers invest, expand, innovate, and hire in Massachusetts. Enactment of these proposals would create 35,000 – 40,000 jobs and lead to real economic recovery in Massachusetts, which currently trails the national average in job growth and is ranked 42nd among the 50 states for job growth over the past decade. The “Renew Mass” proposals are:
1) A “3 in 3” Investment Incentive—A new 3% state capital gains tax rate on investments in Massachusetts-based startups held for at least three years, to encourage startups and patient capital. This proposal would not cost the state any lost revenue for the first two years, and its fully-implemented cost would be $11 million in year 5. It would change Massachusetts’ tax rate on such investments from the 17th-highest in the country to the 3rd-lowest.
2) An NOL Innovation Incentive—Reform of the state’s net operating loss carry-forward rules, bringing them into parity with those utilized by most states and the federal government, to make Massachusetts more competitive for innovation-based industries. This proposal would not cost the state any lost revenue for the first two years, and its fully-implemented cost would be $29 million in year 5. It would move Massachusetts from a tie for the worst NOL policy
in the country, to having one that is in the upper half of all states.
3) An ITC Expansion Incentive—An increase in the state’s investment tax credit from the current 3% to 5%, to spur capital spending and expansion of company facilities. This change would lower short-term state tax collections by $25.5 million annually, increase annual capital investment by $146 million, and spur the creation of 2,800 jobs, which would generate new long-term state tax revenues.
4) An Elective Single Sales Hiring Incentive— Give all Massachusetts multi-state companies the option of electing single sales factor tax apportionment, to encourage in-state hiring, investment, and expansion. This proposal would be phased in over a five-year period, resulting in $20 million less in short-term state revenue collections in the first year and $100 million less in the fifth year. This proposal would spur the creation of 32,000 to 37,000 jobs when it
is fully implemented, and those jobs would generate significant new payroll, sales and property tax revenues.
“Throughout the 2000s, significant business cost and tax increases have overpowered the state’s substantial economic assets, damaging our competitiveness and impeding employers’ ability to revitalize the economy,” said Paul Guzzi, president and CEO of the Greater Boston Chamber of Commerce, which represents approximately 1,500 employers. “We must take decisive action to jumpstart economic recovery in the months ahead, and capture the state’s rightful place as
the best state in the nation in which to do business.”
The long-term revenue impacts of the “Renew Mass” platform are significant. The Chamber estimates $110 million in new personal income taxes from direct job creation when all four proposals are fully implemented. The new jobs would also spur growth in other state and local revenues, including sales tax growth of more than $22 million, additional state corporate net income and license taxes of $6 million, and local tax revenues of $29 million, in addition to revenues generated
by new business formations. By comparison, the short-term static revenue cost in year 5 is $165 million. In sum, the “Renew Mass” platform has manageable costs in the short-term, is revenue-neutral in the intermediate-term, and is revenue positive in the long-term.