BOSTON – There appeared to be a level of agreement among justices of the Supreme Judicial Court that the summary the attorney general wrote of the ballot question that proposes to lower the income tax rate “is not great,” as Justice Scott Kafker put it Monday morning at a hearing that focused on what, if anything, the court could or should do about it.
Led by longtime community organizer Lew Finfer, opponents of the income tax cut filed a lawsuit with the SJC in January arguing that Attorney General Andrea Campbell’s summary of the proposal is so flawed and unfair that the measure should be disqualified from the ballot. The suit claims the summary fails to make clear that one result of the question’s passage would be a reduction in the tax rate for long-term capital gains income.
Campbell’s office has argued that it accurately summarized the proposal that seeks to reduce the income tax rate from 5% to 4% because the initiative “does not propose to amend the statutes setting the rate of taxation for capital gain income.” The question would directly change the tax rate on so-called Part A and Part B income. Part C income, which includes long-term capital gains, is not specifically mentioned in the proposed law, but an existing state law says Part C income “shall be taxed at the same rate” as Part B income.
The contested portion of Campbell’s summary says: “This proposed law would, over a period of three years, lower the tax rates on (1) personal taxable income consisting of interest and dividends, and (2) personal taxable income other than interest, dividends or capital gain income, such as wages and salaries.”
Question opponents argued, and a handful of justices seemed to agree, that the attorney general’s language goes so far as to suggest that the question would not lower the rate on capital gains income.
“It’s the ‘other than interest, dividends or capital gains.’ So not only they leave it out – that’s bothersome to me, because my reading of that is capital gains is not included, right? It’s not just a material omission. It’s, in your view, it’s a material misrepresentation, right?” Kafker said in restating the argument made by a lawyer for question opponents.
Justice Dalila Wendlandt said, “The problem is the way it’s described leads to a misimpression, I think, among the average voter, that this is not going to have an effect on long-term capital gains, or short-term.”
Justices asked about five questions to Lisa Goodheart, the attorney who represented the income tax rate cut opponents seeking to invalidate the question for this election cycle. But they had more than a dozen for Assistant Attorney General Grace Gohlke, who presented Campbell’s side to the court. Chief Justice Kimberly Budd waited only about 10 seconds after Gohlke introduced herself to ask a direct question.
“Do you think it’s a fair representation, a fair summary of what the petition would do?” the chief asked. When Gohlke responded that she thinks it is fair because it describes how the question would directly affect taxation of the two types of income specifically mentioned in it, Budd followed up with, “Why is it a fair summary to explain only two but not the third?”
Gohlke faced similar questions from skeptical justices. Justice Serge Georges said that the AG’s summary “at least suggests that capital gains, that the effect on capital gains is an indirect consequence when that’s just not true” and asked how that could be considered collateral.
Gohlke said Campbell chose the summary language to avoid presenting the average voter with jargon like “Part B income” and instead described what Part B income is, namely “personal taxable income other than interest, dividends or capital gain income, such as wages and salaries.”
When Gohlke responded to a question about whether the ballot question could still be put before voters in November despite an imperfect summary by asserting again that Campbell’s “summary is accurate as written,” Kafker chimed in.
“I find this summary is not great….at least the ‘other than capital gains’ is not helpful in this context,” he said.
Justice Bessie Dewar jumped in before Gohlke could respond to “just pile on to that.” Gohlke had argued that voters would have other sources of information available to them to get a more complete picture of the ballot question’s effects.
Dewar said the ballot question itself “reads really simply, and conveys no information that could cause a voter to be able to tell who’s right” about the capital gains taxation issue. She asked Gohlke about a situation in which voters read the AG’s summary that says capital gains are excluded and then reads a pro or con statement included in a voter information booklet that may say the question would lead to a change in capital gains tax rates.
“Maybe this is a losing battle, but I contest that, or I don’t agree that the attorney general’s summary says there will be no effect on capital gains,” Gohlke said. “What it says is that there is a category of income which is defined in the tax code as excluding capital gains, which will be changed.”
Justice Gabrielle Wolohojian told Gohlke she thought that point need not be debated, “but as a matter of English, I’m not sure that’s a fair reading.” She said she instead had a more simple way of thinking about the issue.
“It’s the attorney general who introduced the words ‘capital gains.’ Those words, I don’t see them in the initiative petition. So once the attorney general decides to introduce this concept into the summary, why isn’t it then that that must be accurate, the effect on that term, or how that term plays into all of this, must be accurate?” she said. “This is not something that was driven by the language of the initiative petition itself. That’s where my rub is. Once you take that on, don’t you have to do it correctly?”
The court could decide to allow the attorney general’s summary to stand and let the question go to voters despite the concerns with it. The justices could also decide that the summary creates such an issue that it would not be appropriate for the question to be put to voters. Goodheart, representing ballot question opponents, and Gohlke were in agreement Monday that, based on the court’s precedent, the remedy for a problematic summary would be for the court to invalidate the question entirely.
Kevin Martin, an attorney at Goodwin Proctor who on Monday represented the first 10 signers of the income tax rate cut question, argued that the justices should allow voters to weigh in on the question even if there are issues with the summary because “this court repeatedly has said that the summary does not need to describe all of the implications flowing from existing law, even if they’re long-standing.”
The SJC says that most cases are generally decided within 130 days of oral arguments, though justices typically move more quickly on cases that involve ballot questions. Secretary of State William Galvin has asked the court to issue an order resolving the issue by July 1 so he can send the required voter information guide to print.
Supporters of the proposal to cut the income tax rate from 5% to 4% over three years say the measure is needed to sharpen the state’s competitive edge and provide relief to overburdened household budgets. Opponents, including Beacon Hill Democrats, argue the question’s passage would upend the state budget to the detriment of social services and municipal budgets across Massachusetts.
Both sides gained evidence to harden their positions Friday.
The state added 12,700 jobs during the six-month period ending with March, but is still down about 7,500 jobs from employment levels in March 2025. The unemployment rate here is 4.7% through March, higher than March 2025’s 4.3% reading and higher than the national unemployment rate of 4.3%.
The Healey administration made it known Friday that its fiscal analysis of the question and its impacts unearthed two consequences of the question that had not been reported or widely discussed.
For one, the charitable deduction that voters approved in 2000 would become unavailable to taxpayers beginning Jan. 1, 2028 because lawmakers who delayed its implementation for years wrote a requirement that the income tax rate be “5 per cent” in a given year for the deduction to be available. That would cost taxpayers about $480 million by the time the tax cut is fully phased in by fiscal year 2031, to state government’s revenue-collection benefit.
Cutting more directly against some of the business interests that have supported the income tax cut ballot push, Healey’s budget office also said existing state law would trigger an automatic corresponding increase in the tax rate paid by businesses organized as larger S corporations.
If the question were to pass and the income tax rate gradually fell from 5% to 4%, the administration said the effective rate paid by those S corporations would gradually rise from the current 3% to 4%.
Martin pointed to media reports about those two consequences Monday as proof that “these other sources of information will wind up flagging information for voters that they may think is important.”
“If you were to include every single cross-reference….this is no longer a concise summary,” he said.