Remember your Economics 101 lesson about the “multiplier effect”? Basically, it holds that $1 spent in a local economy is worth about $7 to that economy because it gets spent and respent in the same place, whereas $1 spent on foreign goods has no similar bounce for the local economy. If our Great and General Court is hellbent to raise the sales tax to 7% (and avoid meaningful reform and state employee job cuts by doing so), at least let them create a two tier sales tax so that any product bearing a “Made in USA” label is taxed at 4%. The FTC regulates such labelling, so it’d be easy to enforce/collect (see excerpt of statute below). The effect would be a huge increase in sales tax revenue initially, but then a huge boost in local product consumption as buyers change their spending habits. I know there will be International Commerce Clause battles, but those can be addressed in the judicial system. It’s worth a look and can avoid the most regressive aspects of a sales tax increase. Here’s the statute:
Title 15 U.S.C, Sec. 45a. Labels on products
To the extent any person introduces, delivers for introduction, sells, advertises, or offers for sale in commerce a product with a ”Made in the U.S.A.” or ”Made in America” label, or the equivalent thereof, in order to represent that such product was in whole or substantial part of domestic origin, such label shall be consistent with decisions and orders of the Federal Trade Commission issued pursuant to section 45 of this title.
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p>Um… aren’t we bound to get a GATT/WTO decision dang quick?
Let me spell it out
In plain sans serif:
An import tax
Is called a tariff.
The WTO
will call the sheriff.
A recession time
Increase in tax
Will give our state
Citizens the ax,
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p>Who work so hard
Those good progressives.
Why do the Dems
Tax more regressive?
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p>Some new ideas
Is what we sought
We won’t get those
With the Reps we got.
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p>On Dasher, on Donner,
on Comet and Blitzen,
If we don’t get new faces
We’ll just get more Shitzen
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p>Point of Sale rebates
For “Massachusetts Made In”
Will take out some sting
For more taxes we paid in.
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p>(With apologies to anyone who ever penned a poem….)
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p>
The FTC statute/regs also would apply to labeling for “Made in Massachusetts” as a point of sale rebate, so that non-Mass goods are taxed at DeLeo’s proposed 6.25% and a 2.25% point of sale rebate is applied for good labelled (in accordance with FTC requirements) as “Made in Massachusetts.” That approach would not discriminate against foreign made goods, so WTO be damned. Your thoughts?