NEWSLINK, V5N3 Spring 2001: Voluntary Checkoffs

Taxpayer check-off proposals seem to be the Spring fling on Beacon Hill. As NewsLink goes to press, several check-off proposals have made their way through the House, including a controversial tax form check-off for the so-called Clean Elections Fund, a campaign finance reform measure approved by the voters in 1998. In addition, the Massachusetts House recently passed a bill that would enable taxpayers to volunteer to pay their taxes at a higher rate. The legislature also approved yet another check-off that would earmark dollars for a Community Preservation Fund.

If signed into law, the “voluntary” income tax rate bill initially filed by House Minority Leader Francis Marini, would allow individual taxpayers to opt for a higher 5.95% tax rate. Last November, voters decided overwhelmingly to scale back the income tax rate to 5% by the year 2003. Tax-cut proponents say this voluntary arrangement will allow people who voted against the tax rollback the option of sending more dollars to fund public services.

But if the past is any guide, few taxpayers may opt for this form of allocating funds a la carte. Today, taxpayers have four choices for increasing the amount of taxes they pay or reducing the amount of their annual refunds: the Organ Transplant Fund; the AIDS Fund; the National Heritage and Endangered Species Fund; and the Olympic Fund. But the rate of participation is dismally small. For example, last year less than 1% of the nearly 3.2 million tax filers opted to make contributions to each of the four funds. Overall, contributions appear to fall as the number of income tax returns increase.

Opting in, tuning out

Voluntary taxes: Who checks off in Mass.