Let us congratulate the House on its apparent recognition that we're going to need new revenues in order to protect critical services. It seems rather unlikely that the draconian Ways and Means Budget is the real blueprint for what's to come. Rather, we're seeing a more dialectical approach, whereby the “honest budget” forces a discussion of what we salvage and how.
This has been turned over endlessly on this board already, but for the sake of emphasis, count me among those unenthused about the option of an increased sales tax.
The concern is that among the options currently being considered, only the sales tax is broad-based enough to raise the revenue necessary to avoid some of the draconian cuts called for in the House budget. This is why the Globe likes it, and they try to make it seem progressive-ish — hey, people can cut back on purchasing!
Adding 1 cent on the dollar to the sales tax would yield $750 million. By maintaining the current exemptions for food and clothing (above $175), the increase wouldn't fall disproportionately on the poor and middle class. Massachusetts would rank only 42nd in the nation in sales tax burden after such a modest increase, according to the Taxpayers Foundation. Families would adjust their purchasing habits, but their income and savings would remain intact.
Some good arguments, but to me, the approach is still a bit callous. People of modest incomes buy more than food and clothing, and money is fungible: Any extra tax these folks pay is money that can't go for necessities.
So, we should be asking ourselves these questions:
- How much more money do we actually need? (i.e. Where can we be more efficient with no/negligible service loss to the public?)
- What tax/taxes raise that much?
- What tax approach causes the least actual deprivation of necessary things?
Isn't it obvious? A progressive income tax. How is this even controversial? It just ain't nohow radical. 34 states have some progressivity in their income tax rates. Check out the graph — couldn't those bars on the right side be higher, without causing anyone any appreciable real pain?
If the state were to amend the Constitution it could establish one or several new tax brackets for higher income households. For example, if a new bracket were created setting a 5.95 percent rate for all income over $500,000 a year it would generate approximately $365 million in additional revenue. If the new bracket were to begin at $200,000 it would generate $570 million. If Massachusetts were to keep the income tax at 5.3 percent for those with incomes under $500,000 but set a higher tax rate of 8.97 percent (which is the highest marginal income tax rate in New Jersey and New York) for income over $500,000, then the state would generate $1.2 billion in additional revenue.
[Emphasis mine.] The Mass. Budget and Policy Center also points out that progressivity can be shoehorned into the tax code without a change to the constitution, by increasing both the tax rate and increasing exemptions at lower incomes.
I simply do not understand how a 25 percent bump in the sales tax — paid by everyone, all the time, every day — is supposed to be politically easier to swallow than a progressive income tax. Nor do I understand how it's supposed to be easier than the Governor's sensible tax proposals. I just don't know what they're hearing, or thinking.
PS: The Globe's comments section remains an insanely depressing read; the thoughtful people must have already ended up here. However, as here, there's a consistent thread of concern and outrage over inefficiencies, pork and patronage. If lawmakers pass any tax increase but spit the bit on pension reforms (for all hires!) and transport efficiencies/accountability (eg: MBTA health care)… they should expect to get their hats handed to them. Gotta do this right.
1 – I’m not a constitutional scholar by any means, so I’m hoping someone can back me up or refute me on this. Wasn’t there a ruling/opinion from the SJC at some point that raising the rate and personal exemption amounted to a de facto progressive income tax rate and would therefore be unconstitutional?
<
p>2 – A progressive income tax would be great, but right now it’s just not going to happen. There needs to be a sustained effort to get this to come about, and we can’t hold off and wait for that day to come before taking action to close the budget gap and address our transportation needs. It’s just not a practical solution to our very immediate situation.
But we can get started on it now.
<
p>
<
p>I have brought up a progessive tax at least 5 time in the last few months. There seems to be a few people who are on board with it, but the conversation ends almost immediately. If a progressive tax is discussed every day, the message will get out there. We aren’t going to get there if we don’t begin at step one, and that would be to discuss, debate and encourage the idea everyday.
<
p>I think the progressive tax is the fairest of them all. I have been struggling with accepting the other options that are being floated out. If we have to do the 6% sales to save the day (after reform)then I will cope, but please let’s stop giving up on the progressive tax idea almost immediately every time it is mentioned.
I believe that the ruling was that we couldn’t have a complicated set of exemptions that phase out at higher incomes. My understanding was that the state tried to have several different levels of exemptions, depending on income level, and that it was practically equivalent to having multiple tax brackets.
<
p>We could probably raise the personal exemption a fair bit without it being a problem. As long as the same exemption is applied to everyone.
<
p>No-tax status, the Limited Income Credit, and the personal exemption do make our tax code slightly progressive. But those measures only affect the first $10-30k of income.
could we expand the MBTA write off to
(a) include other transit agencies, and
(b) make it high enough so that both spouses can write off 100% of the cost of their monthly T combo passes?
<
p>That’d be a smidge more progressive, no? I can’t imagine very many households pulling in a half mil a year are riding the green line in from Newton…
at this link.
<
p>The only way to do this properly is to amend the state Constitution. Yes, it will take years. Yes, it will be a big icky political battle. But it’s absurd that we haven’t done it already. It should be tried again.
This is the battle Deval and DeLeo should be fighting, and in the communities rather than in the press. And for anyone who whines about the difficulty of a Constitutional amendment, remember how quasi-instantly those anti-equality amendments appeared? The anti-gay morons in this state whipped those out quick, so I hope in the Age of Madoff the most progressive state in the country could get this stuff together straight out.
<
p>Especially if DeLeo and Deval show real leadership and take the point on this.
…a constitutional amendment to open up future options AND more revenue that can be legally raised NOW.
<
p>BTW, sabutai, why so negative about the Governor these days? He said himself he doesn’t expect all of us to agree on everything, but it seems you’ve gone to questioning the sincerity of his supporters in ways I’d almost expect more from the likes of JohnD.
I’ve never been as easily impressed by Deval as others here have. But his lack of consistency or leadership on so many issues has been galling — whether it’s the gas tax, pension reform, ethics reform, enforcement of existing laws, or education, he has constantly trumpeting big plans that died quietly. Sometimes with no legislation, sometimes with go-nowhere trial balloons, sometimes with a half-hearted attempt to fight for his ideas, then blaming everyone else when they failed. His current battle against the sales tax is vintage — it’s a self-evidently dumb idea to increase such a regressive measure, and it feels plucked from a hat. But cranking out press releases and amateurish videos (apparently his flack can’t use the zoom on a videocamera) has been a counterproductive way to court the legislature since the early 90s.
<
p>’Cuz most of us grown-ups know that that going “over the heads” — really, beneath the contempt — of the Legislature doesn’t work. It. Just. Doesn’t. Never has, and it won’t magically work in 2010. All the bravado of primarying DeLeo will die quickly, we all know that. DeLeo will be back. Hell, the “best-case” scenario of all this is that useless Democrats are replaced with useless..er…Republicans.
<
p>You get a friendly Legislature by supporting freshmen and sophomores…Deval has ignored them save for one meeting. You get a friendly Legislature by running an extremely tight ship…Deval has his share in the hack pile. LeBovidge should be gone. Aolisi, gone. You get a friendly Legislature by building up a relationship…Deval went around them on casinos, then did his best to dispatch the Speaker when they didn’t do what they wanted. If you’re serious about changing things, you don’t get that change by repeating others’ failure, only louder.
<
p>This sudden rending of garments because the Lege is being so mean to wittle Deval — about as mean as he’s been to them the last year — is ridiculous. If somebody drives on Shaq and gets batted down in the lane, you don’t blame Shaq for defending the paint, you blame the idiot dribbler for doing something that most always leads to failure. It’s Deval’s fault for not knowing that this would fail — hell, even Weld could have spiked this sales tax increase. As I said elsewhere, Deval gets different treatment than Barrios, Cahill, the WFP, DiMasi, or most anyone else for doing pretty much the same things. Who else would be supported for appointing a super-hack like Aloisi? All this shows a thoroughgoing inconsistency that I can only reduce to one explanation — an over-riding support for Deval Patrick and an unwillingness to call him out when he’s wrong in a major way.
<
p>I get frustrated because Deval is often right, but insists on doing things the wrong way. Dismissing criticism and dishonestly cheering him on is merely rewarding bad behavior, and in the long run hurts the values and policies that I share with many other BMGers.
Is how anyone can conscionably vote to raise someone else’s taxes, but not their own.
<
p>I guess it helps to think about how the “rich” people don’t actually need their earnings. Like you would know.
<
p>Someday when we finally get our world government, 3 billion unemployed people in China, India and the third world are going to be eyeing your $50K annual salary like a big fat steaming turkey. From the perspective of people who live on $1 a month, and eat grass when the food runs out, how could you ever need so much money?
<
p>
against a progressive income tax, then I’d say we’re in excellent shape: “Save the rich argle bargle burp squeak China eating grass blurble”
Every tax law has the effect of taxing some people more than others. Even when a tax law is totally flat and non-deductible, the relative ‘pain’ of the tax can’t be said to be flat.
<
p>As such, you will always have people ‘voting to tax others’. This happens with every tax law, and because it happens for everything, the generality is not noteworthy in any particular case.
Because, you know, politically it can work.
<
p>
Sorry Bob I knew you were better than that!
<
p>
Just doing my part to keep the words alive! : )