Here’s a tasty debate topic: you know how the sales tax got hiked from 5% to 6.25% back in 2009, when the state was in the throes of the great recession? Governor Patrick was, for a long time, very leery of going along with the hike, but was more or less forced to sign it once the legislature managed to pass ethics, pension, and transportation reforms that he had said were conditions for his approving it.
Now, as we all know, the sales tax is among the most regressive of taxes. Yes, there are exemptions for food and clothing, which certainly mitigate its pernicious effects. But nonetheless, sales taxes tend to hit people on the lower end of the income scale hardest, and therefore should be kept as low as possible. Furthermore, if the goal is to get consumers to buy more stuff, thereby stimulating demand for goods and services, thereby creating more jobs (remember that increased demand is the real job creator), other things being equal, it would seem like a good idea to keep the sales tax low.
Seems to me that hiking the sales tax was something of an emergency action that the state had to take because of the dire financial straits in which we found ourselves back in 2009. Things are better now. So here’s my proposed topic for debate: the sales tax should be reduced back to 5%, where it was for many years before 2009, and where IMHO it belongs. Doing so would stimulate demand, which helps create jobs, and would demonstrate the legislature’s good faith in that once the emergency that justifies a tax hike no longer exists, the tax hike should be reversed. Yes, I know something like this failed last year. But things are better now than they were even a year ago. I’d be OK with waiting until the “fiscal cliff” nonsense is resolved in Washington, but assuming that gets done in an acceptable way that doesn’t harm the states, what’s the argument for maintaining a regressive emergency measure when the emergency is gone?