The House and Senate have great momentum. Ethics reform moved through the House. Transportation reform moved through the Senate.
Like Massachusetts, New York State is facing massive budget shortfalls. Making cuts can only go far before you start losing hundreds of teachers and police and other public servants. So New York is taking the right step — it’s raising taxes on people who make over $300,000 a year to 8.97%.
Since 1980, the super wealthy have pulled away from everyone else. Wealth inequality has steadily grown. In fact, most families are making less now, adjusted for inflation, than they were in the 1970s. Only the rise in the top fifth, especially the meteoric rise of top 1%, has brought the average up.
The time is right to introduce more progressivity into the Massachusetts tax code. It’s true, we need the 19 cent gas tax increase Governor Patrick has proposed. In fact, we need at least 12 cents just for crucial investments in public transportation to make our economy green and competitive in the future, let alone roads and bridges, as Representatives Carl Sciortino and Alice Wolf have boldy pointed out. The Greater Boston Chamber of Commerce and the Mass Taxpayers Foundation and the Business Roundtable back them up, calling for a 25 cent increase.
Yet the gas tax, unfortunately, a regressive tax — just as MBTA fare hikes and Mass Pike toll increases are regressive. To some extent, the gas tax is an excise tax, that is, it is better if people drive less, and good to give people some incentive to drive less. But gas prices alone have little impact on people’s transportation options. It takes walkable neighborhoods, better public transit, and wise regional and local planning to get people out of their cars. The gas tax has a much smaller impact on a wealthy person than a poor or middle class person.
Increasing the progressivity of the income tax in Massachusetts can help. By increasing the personal exemption dramatically and raising the actual rate, as Representative Will Brownsberger proposed here on Blue Mass Group, we can save low-income and middle class families a bundle, while recouping the money from those who have more ability to pay.