Here’s some information on how the other 5 New England states treat meals taxes:
Vermont
Vermont has a 6% state sales tax. The towns of Williston, Manchester, Burlington and Stratton add a 1% local option sales tax.
Rhode Island
Rhode Island has a state sales tax of 7%. The rate was raised to from 1% to 6% as a temporary measure in the 1970s, but has not since been lowered.
Rhode Island raised its sales tax from 6% to 7% in the early 1990s to pay for the bailout of the state’s failed credit unions. The change was initially proposed as a temporary measure, but was later made permanent.
Local taxes may also apply, such as Cranston’s 1% restaurant tax.
New Hampshire
The New Hampshire meals and rooms tax rate is 8% on any amount more than 35 cents (including any alcohol).
Maine
Maine has a 5% general, service provider and use tax. The tax on lodging and prepared food is 7% and short term auto rental is 10%.
Connecticut
Connecticut has a 6% sales tax, with no additional local taxes. Clothing (per item up to $50) is exempt.
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Here are the votes from the 2003 and 2004 Legislatures, don’t know if there’s been a floor vote since. While the votes topped out at 66, there were some proponents in 03 who switched against in 04 (election year), so in that period, over 70 legislators voted for a meals tax.
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mass.gov/legis/journal/00122.pdf
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mass.gov/legis/journal/00593.pdf
Point of order: I’d like to exclude NH from the mix. It only has a meals tax and no income tax, so there’s some question of comparibility.
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The others:
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Vermont: Net population loser since 2005.
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Rhode Island: Whoa. Huge net population loser since 2005, exceeding even Massachusetts. They’re leaving and they’re packing their lunch before they go.
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Connecticut: Loser
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Maine: Flat.
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New York and New Jersey have higher meals tax too, and they too have lost population.
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Source
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Causality and correlation being as they are, I can’t conclude that high meals tax (or high other tax) caused the flight, but it can’t be dismissed either. In fact, it’s interesting that the state showing the greatest population flight are also lowest in economic freedom, a component of which is the state’s particular tax structure.
“Freedom’s just another word for nothing left to lose”
– J. Joplin
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Lots of people are moving from NY to other states. But, lots of people are moving from other countries in to New York.
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End result: the population to rise slightly, to about 19.3 million. They have not lost population.
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And by the way — this whole idea that a state should be growing in population is pretty silly to me. I don’t want an increase in population in Massachusetts — I want an increase in quality of life. People who aren’t contributing much to the economy — I’d just assume they stay in whatever state they live in now.
Did you mean to say “…I’d just as soon…”?
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That’s a bit harsh. We need workers, and everyone is capable of contributing to the economy. The problem is one of skill sets, and we desperately need workers with skills that match the jobs on offer. Importing them may be one solution, but let’s also figure a way to upgrade the skills of the current population.
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I shed no tears over a loss of population per se, but I do worry that it might be the canary in the coal mine. If people just want a warmer, less densely populated place to live, bless ’em, but if they are fleeing something, that worries me.
You wrote:
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and I wrote
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I’m talking about net contribution. There’s no question that at any given time, some people contribute more than they take, and some people take more than they contribute. I’d much rather people who are net contributors move into MA than net recipients. It’s better for my bottom line and my local economy.
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Some people value cold, density, access to high quality goods and services, great public schools, and access to a huge variety of entertainment. I’m one of ’em. Some people prefer the heat, a few acres around their home and some open road, cheap goods and services, mediocre schools, and have no taste for the opera, pro sports, or ethnic restaurants. They find jobs in Arizona or North Carolina, or retire in Florida. Hopefully they take their blue attitudes with them and help out with the purplification of those states.
Either you’re for population growth and the related economic and tax based expansion, or you’re for low growth all the way around.
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I don’t see a policy that endorses low growth, yet seeks to increase the annual state budget by an amount that exceeds inflation. And, although you’d rather have net contributors than not, you don’t really, as policy, have that choice–take what you have.
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But if population is dropping or flat, why should the size of government outpace inflation? And, why should an administration attempt to feed the resizing with new and innovative taxes like a local meals tax?
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Nonsense. It’s entirely possible to be for growth of community contributors, and against growth of those who take from the community. Furthermore, there are plenty of public policies available to do this — some far more palatable than others.
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Regressive taxation policies help keep poor folks out. Policies that are particularly hard on convicted but now released criminals can make a difference. Zoning policies can keep out lower incomes. High residential exemptions on property taxes can help make apartments less desirable, again putting the squeeze on lower incomes. Heck, eliminating all but federal mandated social services helps too.
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I’m not arguing for or against any of these policies right here — I’m just pointing out that there are plenty of state and local government policy options to help affect the desirability of communities to different income levels.
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General inflation != gov’t cost inflation. More precisely, health care occupies a larger portion of the government’s market basket than it does in the general inflation numbers. The same may be true for fuel costs; I’m not sure. I suspect that if population growth (and income levels) were flat and government salaries were pegged exactly to inflation, that government costs would still be rising faster than inflation right now — without any new services. Health care is increasing quickly, and so is fuel (I think!). So, the overall costs are rising quickly than inflation even without new services or higher salaries.
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Is it all due to health care? I doubt it. But furthermore, maybe, just maybe, the people of Massachusetts want more government services than the state has been providing. Maybe they want the government to spend more money on parks or higher education or mass transit or social services. Maybe, just maybe, the people want (and are willing to pay for) an expanded state government. If that’s what the people want, isn’t that a good reason for the size of government to outpace inflation?
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There ya go, ’cause that’s where Mass is. The options I posted elsewhere addressed the 2007 and 2008 budget.
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2007 – Expenditures $27.7 — Tax Collections $19.5. Fed grants plus misc fill the gap and the budget has no surplus.
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2008 – Expenditures $28.8 — Tax Collections $19.5. This is a darn good early calculated guess based on assertions from the administration that there’s a $1 billion shortfall. It assumes a 7% growth in K-12; 5% in local aid and 3-3.5% elsewhere. Tax collections are flattening out, so they say.
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How to fill the gap, if the people want expanded state government:
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1: Weasel around with the fees, jack the tolls a bit and certainly don’t take ’em down.
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2: Pray for a disaster, real estate busting, job crushing recession and use 9C to eliminate some of the collective bargaining over-promises of the pass. It’ll take a disaster to get a concession from the unions.
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3: Suck it up and raise taxes. Gas, income, corp., meals…whatever floats the boat. It’s so wrong by my thinking, but if you think the people want expanded government, don’t sugarcoat it, tax them for it. That guy in Virginia got away with it.
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4: Eliminate waste, but that phrase is so trite I’m not sure what it means in state government. [Slaps forehead…”why now that I’m elected I should eliminate some wasteful spending.” Brilliant.]
…Either you’re for population growth and the related economic and tax based expansion, or you’re for low growth all the way around.
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What you’re ignoring is the question of just where are you going to put the increased population, and just who is going to pay for the increased services that the increased population is going to demand, and how is it to be financed?
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I suppose that the entire eastern Massachusetts could be populated with 100 story buildings, but who’s going to supply the water and electricity and who is going to deal with their waste products?
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It is all very nice and good to say “increase the population,” but, for those of us from the sentient community, that’s just stupid.
I’m saying how can you justify a government that grows in excess of inflation with a shrinking or flat population.
…elsewhere (all level of governments, and all expenditures, and all taxes), and you might have a point. You won’t have those statistics any time soon. But until you do, you don’t have a point.
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Understand?
You’re just too smart for me.
…I really am tired of people complaining about taxes, when the real issue is where the money is going to come from to fund what they want funded. In the USofA, there are at least three levels of government, each with its own taxing authority. So the Feds mandate certain things, but don’t fund them. And the states mandate certain things, but don’t fund them. So it falls on the property tax payer to pay the things that are mandated by the states and the feds.
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I, quite frankly, am sick of the fact that people in the USofA bitch & moan about government at whatever level, that it doesn’t provide the services that they want, but they don’t want to pay for it–they want someone else to pay for it.
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If you really want a screed, maybe I should write a book.
…news reports from the 1960s and 1970s–that I recall–that indicated that the population centre of the US was moving more toward the west and the south. It is highly unlikely that that had anything to do with taxes. It had to do with the fact that the northeast, which was the earliest settled and the most densely populated, was losing its increase in population to the hinterlands: the less densely populated regions, precisely because they were less densely populated.
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That’s one reason why the Europeans emigrated to the US, because Europe was–and still is–densely populated. The population density in the entire country of Germany approximates that of Massachusetts.
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What you will find, as the New Hampshirites of old did, is that, when Auslaender, such as Massachusettsians, move into the state, they will start demanding government services, that will have to be paid by shudder! taxes. The New Hampshirites have yet to confront how they’re going to have to pay for the services demanded by their populace and required by their constitution to be paid for by the state government.
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Highly unlikely, because …? I’ve known many, many elderly couple who’ve moved to Florida for the sunny days and taxless nights.
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As I wrote, causality and correlation being as they are, I can’t conclude that high meals tax (or high other tax) cause population flight, but it can’t be dismissed either, BECAUSE there is correlation. You dismiss it, not with any compelling logic, but rather with a wave of the hand.
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The original post says, MA has the lowest meals tax in New England. I’m saying if you increase it, you may save State and local government some bucks but you may also give a few residents (restaurant owners?) cause to leave.
I doubt that restaurant owners will leave town because they have to charge an extra dime on a $10 lunch.
…you, like more than a few IMs (Internet Mavens) choose to trunkate my comment. I had told you why is was unlikely, and you chose to ignore that in your comment. You really should consider not ignoring such things when you comment.
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One of the things that you Internet Mavens choose to ignore is the fact that there really are more than a few things going on, that might, just might, be causing a population shift from the northeast more towards the south and center of the country. Maybe, just because there’s more land there. Did that ever occur to you? It did to me when I was growing up in what was close to the center of the country in the 1960s.
All the posting advice is great. You’re too cool. IM = internet maven, who knew?
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I can’t reject weather, housing, availability of land, economic freedom, taxes, sun spots, UFO spotting opportunities or any single variable that correllates with population shift.
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Given that correlation, can you ignore the fact that, because there is correllation, that increase in regulation in Mass and New England, might, just might, be a significant factor in causing a population shift from the northeast more towards the south and center of the country.
Let’s suppose a state is really good to live in. It has low taxes, great schools, and a salutory social climate.
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People will want to live there. This will bid up the cost of housing (typically the biggest chunk taken from a workin’ stiff’s paycheck). The state will become unaffordable. People will move.
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Lo and behold, housing affordability also seems to explain, very nicely, the population changes that you’ve chronicled.
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Massachusetts – 3rd-least-affordable housing in the country
New York – 7th
Vermont – 10th
Rhode Island – 5th
Connecticut – 4th
Maine – 11th
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This has the added advantage of better-fulfilling Occam’s Razor.
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(Incidentally, this phenomena is an example of what engineers call a negative feedback system. Negative feedback systems are prized for being very, very stable over time.)
It would be interesting to see if housing affordability is essentially the only component that matters in your referenced index, i.e., if the “economic freedom” index is highly correlated with housing affordability, but substantially uncorrelated with the other components of the “freedom” index.
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If that were the case, then the other components could be (and should be) tossed out.
…and until taxpayers in Massachusetts recognize that, that is one of the major things that will be driving people out of Massashusetts.
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A couple of years ago, the Globe ran an article about property taxes in Acton. The gist of the article was that rising property taxes were driving elderly people who had lived there for decades out of town (and likely out of state). The elderly people probably had had children in the public schools, but at that time they did not. What those elderly people were replaced with were younger people with children who demanded services such as, among other things, the rather expensive public schools demanded by the other residents in town. The problem for the town adminstrators was that the taxes on each individual property was insufficient to fund the costs for the students in the public schools. So every time an elderly resident moved out of town, to be replaced by a family with kids demanding access to the publis schools, there was a further deficit in the town’s coffers.
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The state really has to deal with this property tax issue. The state tax rates otherwise is really relatively reasonable in relation to other states in the US. But our property taxes on our hovel in Wellesley have tripled over the last 20 years. And, we have made no use of the public schools. Our property taxes here are ten times over our property taxes on our house outside of Munich (Germany), and we are contemplating leaving the US for Munich in large part because of the taxes.
The total tax burden in MA, including property taxes, is in the bottom half of the country (see http://www.taxfounda…). I would think that the total tax burden would be of more interest than any specific tax (but psychology could be a factor).
Massachusetts ranks way down there in terms of taxes — has for years. There are 35 states with higher income taxes (as a % of personal income).
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If our state collected taxes at the same overall rate as the national average, we’d have a billion dollars more coming into the treasury each year. Asking state agencies to “save” money it a fool’s errand, imho.
While our tax burden is low, our level of services is excellent. For example, a href=”we almost certainly have the best K-12 educational system in the country[/a] (forgive the link to my own blog).
Thanks for the link. No need to apologize for self-promotion. That’s part of what we’re all here for; to establish credibility.
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I have just one request: please don’t use the right-wing phrase “tax burden” — taxes are not a burden (bad thing), but an investment (good thing).