Statement by Marie-Frances Rivera, MassBudget President, on the PPP “double-dip” tax break
“The Legislature’s decision yesterday on Emergency Paid Sick Time and Unemployment Insurance (UI) creates cause for celebration. Providing targeted tax relief for unemployed workers whose income falls below 200 percent of the poverty line is commendable. As stated in our recent brief
, Black, Latinx, and Indigenous workers, as well as low-income workers, have particularly benefited from UI. These two policies provide opportunities for an equitable recovery from the pandemic.
The Legislature’s decision is also cause for concern because it creates a new “double-dip” tax break only
for those business owners who have received Payroll Protection Program (PPP) grants and
have been profitable. Despite characterizations to the contrary, the PPP grants do not raise state tax bills. All expenses paid using PPP dollars are already tax deductible
. This new tax break will give profitable business owners an additional
deduction on these same expenses.
The Baker Administration estimates this new double-dip tax break will cost the Commonwealth $130 million in lost revenue. This money could be better spent helping businesses that are really struggling, or getting our K-12 funding plan, the Student Opportunity Act, back on track. There is no shortage of unmet need in our communities.
The Legislature’s decision continues to favor profitable business owners who have done well during this dark winter. Yet again, this leaves us with less revenue to support communities, families, and small businesses who are struggling during this pandemic. Without this revenue, we can’t create an equitable recovery in the Commonwealth.”