Opinion ID: 2031083
Heading Depth: 1
Heading Rank: 1

Heading: Are Plaintiff Corporations Materially Affected by the Proposed Constitutional Amendment?

Text: Prior to its 1972 amendment, G.L.c. 55, § 7, did not prohibit a corporation from expending or contributing any money or other valuable thing for the purpose of ... affecting the vote on any question submitted to the voters provided the question materially affected the property, business or assets of the corporation. In Lustwerk v. Lytron, Inc. 344 Mass. 647, 653, we held that a question to be submitted to the voters at a State election, proposing a constitutional amendment granting the Legislature the power to impose a graduated income tax on either corporations or individuals, was a question materially affecting the property, business or assets of a Massachusetts business corporation. Expenditures by such a corporation for the purpose of influencing the voters on that proposed constitutional amendment were not, therefore, prohibited by c. 55, § 7. The effect of the language of the proposed constitutional amendment in the Lustwerk case, supra, [5] is very similar to that of the language of the constitutional amendment to be put to the voters on November 7, 1972. [6] The proposed constitutional amendment would authorize the Legislature to impose a graduated tax on individuals and corporations. [7] The plaintiffs contend that the potential power to impose a graduated income tax on corporations and individuals would materially affect their business and property. They maintain that such a power if enacted would discourage executives from settling or remaining in the State, alter the plaintiffs' wage and compensation structures, shrink total bank deposits and cause a great decline in the State's economic climate to the detriment of the plaintiffs' own business. Whether or not all of the plaintiffs' predictions concerning the future effects of the imposition of such taxes are accurate is not decisive. Indeed it may be that the Legislature will never exercise such power even if granted by the people. However, it is reasonable to conclude on the record before us that the proposed amendment, like its predecessor in the Lustwerk case, supra, at 651, materially affects the property, business or assets of the plaintiff corporations and thus the plaintiffs have reasonable justification for believing that the amendment would so affect them.