Webcast of the “Budget Debate” live NOW see link:

Here is the link:  http://masslegislature.tv/?l=h…

This broadcast is not as clear, or easy to hear and follow as the former video coverage.  I often learned from watching the “rostrum conferences” and other interactions.  It helps that I am somewhat of a lip reader and have an excellent, nearly professional lip reader in my household [ due to an exotic hearing disorder called "deaf against ground" ].

As to my own comments on the budget:

1.  Local option taxes are long overdue.  

Local option taxes are both nimble, and capable of being tailored to local conditions. Legislative micromanagement of cities and towns has the problem of not being as responsive to local conditions and needs as a local option tax handled by local government – responsive to local voters – would be.  Micromanagement from Boston is also not the best use of governance resources.

2.  Putting all the “eggs” in the sales tax basket is fundamentally unwise.

We have all seen the horrific impact of over reliance on the capital gains tax.  In a deepening recession/depression, with neighboring states without sales taxes, we both hurt local business and repeat the “too many eggs in one basket” approach, thereby undermining the real work done by Chairman Murphy of Ways and Means and the timely effort to restructure revenue generation/taxation/the general fund.  Lets learn from our mistakes and create a multi-pronged set of new revenue streams, please.

3.  Progressive taxation, done correctly, is less vulnerable to economic swings and cycles.

My favorite so far was Rep. Brownsberger’s approach in which the “earned income tax” was used to create a progressive buffer in an increased income tax as this does not require a constitutional amendment to bring immediate restructuring to fruition.

The reason “progressive taxation” is less vulnerable is that, frankly, the very rich have gotten so much into their grasp that their incomes are very stable, as are their assets, while those dependent on employment in the lower and middle ranges are experiencing loss of buying power each year, thereby rendering sales taxes and fees vulnerable.

4.  Holding all tax reform “hostage” to universal reform will only hurt the most vulnerable.

Clearly, economic activity must be increased or the downward spiral will continue.  I am no fan of hereditary government employment, unfair pensions, or those who game the system.  However, economic activity begets economic activity and inactivity in ensuring jobs and the ability of municipalities to avoid layoffs will only lead to a faster downward spiral.

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10 Comments . Leave a comment below.
  1. Jay Kaufman speaking NOW

    About the devastating cuts to public health!!

  2. AmberPAW is right...

    ...and raising the sales tax is a bad idea.  I just wish we had a more competent salesman for these ideas than the governor...attacking the Legislature by press release is SO 2005.

    sabutai   @   Tue 4 Dec 7:00 PM
  3. Another Take

    1.  Local option taxes only work for communities that have a significant base of restaurants, hotels and retail businesses--in other words, cities and towns that have historically not had high residential property taxes.  If the General Court passes a local option, they will say "all done, we helped the cities and towns" and leave real estate dependent towns in the lurch.  I don't think that's fair tax policy.  

    2.  I agree that the "sales tax only" approach is bad, and is especially hard on merchants near the northern border.  

    3.  A progressive income tax is not an option for FY 2010, 2011 or 2012.  Everyone wants to talk about it as if it was available for this revenue cycle/crisis.  Its not.  Raise the income tax.  Those who earn more will pay more.  Its not complicated.

    4.  I disagree.  As Rahm Emanuel said, "You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."  If the legislature is ready to tackle structural reform, they can do it in weeks, not months.  I just left my town meeting.  We are putting off voting on the FY 2010 budget because we are likely to get stimulus money that will prevent major layoffs or other cuts.  I think the legislature can delay voting on a tax package for another couple of weeks to work on a reform bill that is meaningful.

    • I'm not so sure I buy your conclusion on (1)

      1.  Local option taxes only work for communities that have a significant base of restaurants, hotels and retail businesses--in other words, cities and towns that have historically not had high residential property taxes.

      I get the theory that businesses aren't as big a drag on local services as schoolchildren (for example), but do you have any evidence for this claim?  I could imagine a host of other factors swinging this, ranging from populations very dense with seniors and studio apartments to particular non-residential properties which lead to high expenses for the town.

      I do agree with your concern about "all done."  One way is to have other kinds of local options.  One I like is a local options gas tax: 1 cent for the state, 1 cent for the town (earmarked for transportation), and 1 cent for the nearest mass transit hub, or used for sidewalks/bikes/carpool etc.

    • not completely true

      Local option taxes only work for communities that have a significant base of restaurants, hotels and retail businesses--in other words, cities and towns that have historically not had high residential property taxes.

      It's not that black-and-white. There are towns whose tax levy is very residential-heavy yet they still have a significant number of restaurants, enough to make the local option attractive. Arlington and Lexington are examples.

      I don't like the idea that if not everyone wins, everyone has to lose. If we say no to these local options, then if we figure out something that works for another set of communities, we can use the same "it doesn't work for everyone" argument and end up getting nowhere. I'd rather have a collection of solutions that cover as many communities as possible.

  4. Reading that DeLeo...

    having back room meetings to get a veto-proof majority to cram the sales tax without reform.  I'm just disgusted.

    • yep

      looks like he swung the numbers in a huuuge way. it can be tough to go against the speaker - the costs can be huge if the Speaker wants them to be.  

  5. Cali and Progressive taxes

    not so sure, after talking to my sister, that the progressive tax is the panacea that you depict. Cali's state income tax is very progressive (in that for most people it is a trivial amount); they have now seen these revenues fall off of a cliff since high end earners have seen radical drops in income.

    If your intent is to just increase taxes on the wealthy, you would be advised to consider that we are a little bitty state with financial services industries that can move at the drop of a hat.  And given that MA doesn't recognize mortgage, property tax, or charitable deductions (but does provide for SS and rent deductions), don't necessarily think that the MA income tax as constituted is all that flat myself.  No real easy answers here, and given the constitutionality issues, think a near-term solution doesn't consist of expending efforts on a progressive tax as the magic bullet.

  6. deaf against ground

    I google searched that with quotes, and the only two hits were yours.  What the heck is deaf against ground?

    • Deaf against ground

      Is a laypersons way of saying what has a longer name, I guess.  It is when a person, in a situation with multiple sounds [say a noisy restaurant with a blaring sound system] cannot pick which sound to hear, so all the founds become a kind of sound soup.  This is a sensory integration condition in which the ability to focus on just one sound, and have your ears pick one sound among many is lost or impaired.  Folks with this condition hear well in a quiet environment, and are often taught to read lips because otherwise, in say a MBTA train, or a classroom without carpet, they cannot otherwise tell what a teacher or classmate is saying.

      If someone says something like, "I cannot hear you from behind" or is always "getting it wrong" or has trouble following oral directions, testing in a sound both, gradually increasing the back ground noise can diagnose this neurological condition.

      In GAL work, I have several times pushed for full hearing examinations utilizing the sound proof booth  and twice found kids with this disability [it is a significant hearing loss but is not a problem with volume but with the ability to separate sound strands, at least that is how I think of it] and added the requirement that all directions and instructions also be provided in writing.

      Such kids are often penalized for "failing to follow instructions" or being insubordinate when the oral inforamtion is, for them, a jumble and not comprehensible albeit if spoken to one on one, or in a q1uiet environment, they process auditory information perfectly.

      My son has this disability; he lodged in the birth canal requiring oxygen and so folk sometimes tell me I am "loud" - probably true; anyway, at least no judge ever has to say, "Attorney Butler, speak up please.  These microphones only record, they do not amplify."

      You may have to search for sensory integration disorders to find more information and/or the current proper name for this!

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