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September 30, 2013

New tax panel with Tarr eyes code overhaul

BOSTON — Just months after the Legislature scrapped Gov. Deval Patrick’s plan to overhaul the state’s tax code, a new special commission has begun work studying ways to accomplish just that.

The Tax Fairness Commission, co-chaired by Rep. Jay Kaufman and Sen. Michael Rodrigues, held its inaugural meeting last week, gathering lawmakers, economists and others to begin a review of the complex tax code in hopes of recommending ways to make it simpler and fairer while promoting economic growth and staying competitive with other states.

It’s a tall task, especially considering the commission’s five-month window to complete its work and the likely diversity of viewpoints among the commission’s members. Final recommendations are due March 1, and the committee expects to meet once a month through January and twice in February to meet that deadline.

“If we are successful, we will be the most successful tax commission in the history of Massachusetts,” said commission member and Senate Minority Leader Bruce Tarr, the Gloucester Republican.

“I’m hoping and confident that we can advance the public conversation,” said Kaufman, who also co-chairs the Legislature’s Committee on Revenue with Rodrigues.

Patrick in January proposed a plan that would have raised $1.9 billion in new revenue for the state by increasing the income tax rate, lowering the sales tax rate and eliminating dozens of personal and corporate tax exemptions and deductions. The governor argued that his plan would not only generate the money needed to invest in transportation, but make the tax system more equitable for people across the income spectrum.

The Legislature swiftly rejected Patrick’s proposal and turned instead to the gas tax, the cigarette tax and a tax on software design services, which now appears headed for repeal, to generate new revenues for transportation.

The commission was created by Sen. Karen Spilka, who succeeded at inserting an amendment into the $500 million transportation financing package approved in July tasking the 15-member panel with a thorough review of state tax policy. The work of the commission comes on the heels of recommendations made recently by a similar Tax Expenditure Commission that took a look at the system of tax exemptions, deductions and subsidies extended to individuals and corporations to relieve tax burdens on certain populations and spur economic growth.

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