Now let’s talk about revenues. Can’t the legislature identify a more progressive choice for increased revenues than the sales tax? What’s wrong with a small increase in the income tax? The Institute on Taxation and Economic Policy data shows that taxpayers with the lowest 20 percent of incomes pay only 0.2 percent of their incomes in personal income taxes. The middle 20 percent pays 3.5 percent of their incomes in personal income taxes, and the top 20 percent pays about 4.3 percent of their incomes in income taxes.
With sales taxes, it’s the reverse, as I’m sure you know. Sales taxes hit those who can least afford them hardest. According to the Massbudget website, the lowest 20% of earners (making under $18K) can expect to pay 4% of their income in sales taxes, the next cohort (making $18K-$34K) can expect to pay 3% of their income in sales taxes, and it declines with each of the remaining 20% cohorts until the top 20% of earners (making over $97K), pay only 1.4%.
If the legislature can’t find the fortitude to raise the income tax, then why not the Governor’s gas tax proposal, which would still be regressive but at least offer the added advantages of encouraging conservation and use of public transportation and reducing carbon emissions? Or why not the local options (meals and hotel) taxes, which would give communities more flexibility?
I also don’t get why the rainy day fund isn’t being tapped at all in the budget proposal for next year. It’s raining now. Not much point in decimating services, when there’s money in the fund.
Thanks for listening. Please do the right thing.
and see what we actually did pay in MA state taxes. It’s a little confusing, because I sent a good amount of money to Connecticut, because that’s where I work. But I’ll see how the percentage lines up with above statitistics, and then I’ll decide where I stand on that one.
I can’t post my letter here because I called on the phone, but I’ve been encouraging people to call their state rep and senator. What I’ve been saying, to paraphrase, is that it bothers me that the legislature is considering severe cuts and heavy damage to to the state when the real problem is that our income tax has been too low for years, and they really need to raise it a little bit instead of brainstorming all sorts of alternatives that are worse for us just because they’re afraid of doing the right thing.
According to our returns last year we paid 4.06% in state income tax. The CT portion was deducted from that. According to the link noted above and here Link
we are paying more than the “Fourth 20%” which is the bracket we are in. That rate appears to be about 3.8% for that bracket, so our tax at 4.06% is well above that. I must not know how to capitalize on loopholes. If you ask me that particular range of income from $58,000 to $97,000 is awfully broad. Big difference in lifestyle from the beginning to the end of the range. Next year we are losing the $3600. dependent under age 12 deduction so while that will barely be a quarter of a percent increase, it is an increase none the less.
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p>One of the reasons I am against an income tax increase is because we just received a federal income tax reduction for the sole purpose of stimulating the economy. It would be a slap to the Obama stimulus plan to take some of that stimulus away by increasing the state income tax, although technically, any tax increase is taking away from the Obama Fed tax decrease. That is probably why the state is reluctant to talk about an income tax increase.
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p>I still think a graduated progressive income tax is the way to go, even though supposedly it is impossible to achieve without legislative changes. They could at least start the process.
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p>If I have to pay an additional tax, I would prefer to pay a 6% sales tax exempting food and clothing, go ahead and tax candy and soda, put the 6% sales tax on gas, and then make the dam budget work, improve our infrastructure, stop unnecessary spending, and stop playing political games.
They need to know that we get it that new revenues are needed, what our preferences are for where to find them, and that we’re holding them accountable on reform.
Tax. Tax. Tax. Why not use the monies already taxed more efficiently? I’ve been in state government and seen the incredible amounts of waste of tax dollars.
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p>The posters in this blog seem to be a bright crowd with an insight to how government works. Why not suggest ways to save tax dollars? Surely there are many intelligent suggestions waiting to be written. Suggestions that could save money and promote more effective government.
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p>I’ll start with an idea from Maine. They had over 200 school districts. Each school district had all the staff and rented all the space needed to run a school district no matter what the size. Maine folks got together and realized this was a squandering of tax dollars. They trimmed the school districts to about 80. Savings lots of bucks. Why couldn’t that work here? Regionalize. This is just one suggestion. I’m sure that the intelligent posters of this blog can produce excellent ideas.
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p>Whatever tax increases are made, they will be aimed at the people less able to support themselves. If we are able to save tax revenue, we help the less fortunate.
AND providing revenue sources that fund the necessary levels of services. I don’t want to see those with the least voice in our society (children, the disabled, the mentally ill) harmed because we can’t find in ourselves the responsibility or the generosity to fund the schools and programs they need. I also don’t want see continued deferral of the infrastructure maintenance we should do today into the future. It will only cost more when we finally get around to it – and perhaps cost in lives if it takes a bridge collapse or a dam failure to get us to act.
First of all, it’s highly unlikely that there’s enough “waste” in the state budget to get anywhere close to plugging the budget hole. Out of 20-something billion in the state budget, I’d believe there may be as much as a few hundred million in “waste”, though it’d take a lot of work to find all of it, and people would disagree on what’s wasteful. But we’re more then $3 billion in the hole for this year!
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p>Sure, you may find some example of waste that’s costing a few million dollars a year and call that an “incredible amount of waste”, but in comparison to the problem we’re trying to solve now, it’s effectively irrelevant.
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p>Secondly, it’s a separate issue. Sure, if we can find waste and root it out, that’s great, but it’s an ongoing project. Anything that would’ve been easy to fix, would’ve been fixed already. Stuff that hasn’t been fixed hasn’t been because someone hasn’t thought of it, or it hasn’t come to light, or it takes time to fix, or there are political obstacles, etc. We can keep working on these things – investigating, thinking of new ideas, putting political pressure on obstacles – but we can’t declare by fiat that simply because there’s a giant budget hole, these problems can be assumed to suddenly disappear. We can’t wave a magic wand and get every bit of waste out of the budget all at once.
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p>So even to the extent that there is waste that we could in theory take out of the budget, declaring that so won’t suddenly make it possible for us to fund basic infrastructure and services when revenue plummets. You can’t pay teachers and polices officers in the equivalent of stock options on future waste reductions. Even if there were enough of those future waste reductions to even contemplate that as a significant part of the solution, which is just wishful thinking.
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p>Talking about this is just a way to deny reality and pretend that we don’t need revenue.
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p>The fact is that the state’s income tax is too low, and has been too low for years, and we’re doing steady damage year after year. Not to mention that we added health care to the basket of state services, something that’s surely worth a point or two of income tax (and would still save most people in the state money). This year, the damage will be much more severe, because of the recession.
you must be kidding right?!
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p>You are right that WE can’t wave a magic wand to get rid of waste but the elected officials can simply DO IT! Instead they wait and ponder and debate and strong-arm and manipulate and think about it. It is completely ridiculous.
The sales tax increase was so easy, they didn’t have to wave a single magic wand to get that passed. They barely had to think about it.
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And I appreciated the ability to cast a vote for more than one new revenue stream.
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p>I think if our legislators can come up with one amendment that provides for:
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p>a little bit of an increase in the a sales tax, and a little bit of an increase in the income tax rate (accompanied by an increase in exemptions) dedicating those revenues to the general fund,
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p>repealing the exemption of the sales tax on booze, candy and sweetened beverages and dedicating those revenues to treatment and a wellness fund,
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p>an increase in the gas tax by 19 or twenty cents dedicating those revenues to transportation debt relief and improving and protecting public transportation,
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p>a local option tax on meals and hotels for local communities
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p>AND opened up the Earned Income Tax Credit eligibility to more of the working poor
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p>we would have a reasonably progressive, balanced and adequate tax package that could begin to address the structural deficit and pay for the necessary “reforms and repairs” that can stabilize the public structures that keep our communities healthy and our state strong.
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p>This is no time for furloughs and layoffs in pour public programs — this is the sort of time when residents need the services the most.
I’m ready to add it to my invoices and turn in the dough to DOR.
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p>5% SALES TAX INCLUDING COMMISSION FOR SERVICES UP FOR DEBATE MONDAY IN THE HOUSE
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p>Representative Peter Kocot (D-Florence) has filed an amendment to the House Budget that will impose a new 5% sales tax on services. If adopted labor sold to the public in any trade could be viewed as within the definition of service. A 5% sales tax would be collected on each bill for services such as real estate commission or legal services.
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p>Amendment #28 is among the thousands of amendments that will be considered as part of the House deliberations next week. It is anticipated a host of tax proposals including amendment #28 will be taken up on Monday.
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p>And lawn services and cleaning services and legal services and advertising services and web design services and on and on.
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p>Makes sense? After all we have to pay a sales tax on lawn movers and mops and and computers (unless we order on line.)
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p>About time I say
Doctors, nurses, other health care workers services makes great sense. Now we can tax the elderly, sickly, helpless and do our part not only to decrease the surplus population, but lower the carbon footprint. Do your part to get rid of worthless eaters!
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p>And, while we’re at it…
Think it would drive a lot of service work into the underground economy. Service businesses also don’t have the systems in place today to collect and pay this tax. Would rather see a bump up in the rate of an existing tax – less effort and impact to implement.
You’ve posted your list of revenues. Please post your list of reforms, as per your slogan.
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p>Or — are you saying that imposing these taxes constitutes reform?
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p>You write that we have to raise taxes to “pay for reforms and repairs.” But reforms would SAVE (not cost) money, which could then be used for repairs and services.
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p>We may or may not have $3 billion in waste, fraud and abuse (WFA) to recover (we can’t find out without more transparency and accountability). But even a few hundred million is worthy getting, isn’t it? We’re losing $500 million a year just in a certain set of corporate loopholes – a billion lost in Deval Patrick’s first two years. He predicated his new programs on eliminating them and other WFA. Waving off these money sinks as trivial sends a signal to officials that they can safely ignore them and go on to raise more revenues.
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p>I’m a champion of big, active government, and tax-based funding all the services we owe each other as a society. But we can’t condone operating two governments, one for private corruption and the other for public services.
Pension reforms as out lined by Jay Kaufman and others in their report a couple of months ago. Won’t amount to much $$ but important to begin to rebuild confidence in government
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p>More Tax reform like getting rid of more corporate loophomes including the disgusting film industry credit (50 M all by itself.)
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p>Transportation reform — lots of stuff to do here that doesn’t save that much, and indeed will take some additional resources to expand various public transportation systems.
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p>Ethics reform including more accountability for lobbyists, again won’t save money, and may cost more to build a searchable data base.
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p>Budget and policy process transparency again will cost money to build a user friendly, complete, useful and searchable data base for policy makers and the public.
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p>Public Health reform again will cost money to strengthen public programs including mosquito control, food inspections, water processing plants, disease and epidemic controls that currently put us all in danger.
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p>Education reform and investment to strengthen our public schools and provides programs for special needs kids.
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p>Human Service reforms that provides safe and healthy programs for our elderly and disabled family members and neighbors. Will need substantial investments.
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p>Environmental protection reforms to protect us from various man made hazards that threaten the public’s health.
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p>Public employee reforms — just getting and keeping skilled people working at a living wage including adequate benefits will take more investment. Not a time for layoffs and furloughs people!!
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p>I could go on, but it’s Saturday night! What’s your list?
The people claiming that there is all this waste in government and therefore we shouldn’t raise taxes can root out the waste and propose the reforms.
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p>The people claiming that we need new revenue can figure out how to structure that.
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p>It’s called bipartisanship.
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p>Then again, I suspect the people claiming all this waste don’t really have a desire to root it out — doing that will prevent them from playing that card over and over and over…