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Listening tour: Revenue Committee in Worcester

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When asked about whether Massachusetts needs to increase taxes due to a possible $1 billion deficit in the fiscal year 2010 budget, and an even larger deficit next year, Beckwith noted that while there is no consensus on any new revenue proposals at his organization at this time, the group has consistently supported revenue measures put forward by the Legislature or Governor.

There are a wide variety of revenue options to look at, he said, including broadening the sales tax to include services and increasing the income tax rate.

Other options discussed at the meeting included a call for a local income tax option for Massachusetts communities. Virginia McIntyre of Concord said her town’s over-reliance on the property tax has made it difficult for the 40 percent of households there who earn less than $60,000 a year. The average property tax bill there is $12,000 a year.

Worcester Research Bureau CEO Roberta Schaffer said the dual tax rate that allows Worcester to tax commercial property at a higher rate than residential property has driven businesses to suburbs and argued for a single rate. Worcester taxes commercial property at $29/sf, while neighboring Shrewsbury taxes property at $9/sf.

Al Hartheimer, an economist from Lanesborough, argued on behalf of a land-based tax that values vacant land higher than buildings.

Kaufman opened the meeting with a review of the criteria through which the Legislature commonly views taxes – adequacy, fairness, stability, congruency with state policy goals, efficiency, transparency, simplicity.

Kaufman’s slide show illustrated the balance Massachusetts has struck between the income tax, property taxes, corporate taxes, the sales tax, fees and other revenues.

Beckwith followed with his own presentations, showing how cuts in local aid have forced cities and towns to rely more and more on the property tax.

An over-reliance on the property tax is dividing Massachusetts communities, Beckwith said. The wealthier communities can continue to provide higher levels of service because their residents can afford to pay higher property taxes while lower-income communities will face greater cuts.

“It’s a really regressive policy,” Beckwith summed up. “The more we divide Massachusetts, the harder it will be in the future to have equity.”

Beckwith also noted that many towns are struggling with unfunded mandates — like the Quinn Bill, SPED and charter schools — that he says have become the equivalent of earmarks on communities property taxes.

At the same time, according to Beckwith, the number of communities seeking overrides has dropped from 22 percent in fiscal year 2008 to 13 percent in fiscal year 2009 and just 4 percent in the current fiscal year.

Also in attendance at the meeting were Revenue Committee Co-Chairman Sen. Ben Downing and reps Alice Peisch, Lew Evangeledis, Jay Barrows and James Arciero.

Kaufman stressed that the listening tour is a forum to share ideas.

“This is not a progressive issue or a Democratic issue,” he said. “We all know something is amiss. We have to think outside the box.”

Committee Co-Chairman Sen. Ben Downing said the comments received in the listening tour will be helpful to legislators as they make difficult decisions on revenue.

“Talking to folks like you helps guide us through this process,” he said.

The next stops on the Revenue Committee’s listening tour are:

Framingham – Tax Policy and Vulnerable Populations
October 13th
10:00am to 12:00pm
Framingham Senior Center

Pittsfield – Tax Policy as a Tool for Economic Development
October 21st 
2:00 pm to 4:00pm
Berkshire Community College

Fall River – Tax Policy and the Taxation of Property
October 28th
6:00pm to 8:00pm
City Hall (pending confirmation)

Cambridge – Tax Policy and Working Families
November 5th
6:00pm to 8:00pm
Harvard Kennedy School of Government – JFK Jr. Forum

(Cross-posted on ONE Massachusetts.org

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  1. People are going to be howling… all the consultants! and lawyers! Although my current product is subject to sales tax, (and income taxes, and schedule c taxes, all equal to more than 50% of my gross income because of joint filing), I can’t imagine this goes through.

    <

    p>To those who hate a services tax, please consider how it feels to imagine your profession taxed, because that’s how it feels to those of us who sell physical products. Think about it before you jack up the sales tax again.

    <

    p>Also this conversation takes place without any consideration of the effects the tax has on the private activity which produces the money in the first place; such as the fact that sales taxes hurt sales (and income, and corporate income), and so produce less revenue than expected. Forget that we could live without a lot of the services that are deemed vital.

  2. from the State House news service in part on the first day of a vigl outside the Governor’s office.

    <

    p>

    PATRICK MEETS WITH DISABLED: Individuals with developmental disabilities and their family members and caregivers launched a vigil Thursday morning in Gov. Deval Patrick’s office, where one advocate urged the state’s chief executive to consider higher taxes as an alternative to spending cuts that could fall on services the disabled depend on to live independently, get to and from their jobs, and maintain relationships…………

    <

    p>

    ……..Leo Sarkissian, executive director of The Arc of Massachusetts, said daily vigils in Patrick’s office were planned and would eventually extend to the offices of House Speaker Robert DeLeo and Senate President Therese Murray.  Sarkissian said ………………about emergency budget cuts and a 10 to 15 percent budget cut next fiscal year.  “We don’t feel like we could handle that,” he said.

    Saying the disabled don’t want to preserve their accounts at the expense of foster children or the poor, Sarkissian urged Patrick to explore a plan “where we don’t just cut our way out” of ongoing budget problems and recommended that the governor explore borrowing, an increase in the income tax, or rolling back state tax credits or exemptions.  

    <

    p>

    ………… Sarkissian later said he planned to testify before legislators holding a “listening tour” in favor of replacing the sales tax with a progressive income tax.  

    After a public session, Sarkissian and Gary Blumenthal, executive director of  the Association of Developmental Disabilities Providers, met privately with the governor.  Blumenthal said some disabled individuals are “hysterical with fear” of losing services and said Patrick thought the use of federal funds to address the needs of the disabled “was an issue worth discussion.”…………..

    • To Seascraper:  A) Just what are the “services” you say you could so easily live without?  B) Why do you think everyone can live without the items you listed in A?  I wonder if you included elevators at MBTA stations in A [most still do not have these, and after hip survery, for example, I could not use the MBTA]

      <

      p>To Judy:  A) What are the services the Arc and others listed above are fearful of losing?  B)  Why do the services in A matter, and why should/must government provide these services.

      <

      p>My inquiring mind finds both of your posts deficient.  Help me out with some concrete, snark free details.  Please.

      <

      p>But as for the “3s” that Seascraper and Purple handed out – cheap shots if you ask me.  All Judy did was share a news source you and I cannot afford – did YOU know State House News Service costs about $2400 a year – probably more….so anyway, Judy, thanks for sharing.

      • EHOHHS programs may be cut by as much as $300 million. The programs worried about cuts are day programs for the mentally ill, clinical teams and residential services for people with mental retardation. This is the third time in as many years that day treatment has been threatened. If day treatment programs are closed more people will end up in the hospital.

        <

        p>DDS, formerly DMR, officials are saying that there might be cuts in clinical team services, day programs, and for the first time in years residential services.

        <

        p>INMHO government is at its best when taking care of the least. People with mental retardation and mental health issues need support from the government. The cuts that people are talking about would cause the dismantling of the human service system

      • It’s a long list Deb, and the best I can do is refer you to the Mass ARC site that describes a wide range of community based services for the developmentally disabled that have been built up since the early 50’s in this state thanks to the good work of parents and families though Mass ARC and other groups.

        <

        p>It was largely parent groups who fought hard in the 60s to clean up the state institutions like Belchertown and Fernald who cared for severely disabled folk who had been committed to state institutions at infancy. In the early 70s a group of parents sued and ended up winning the sometimes reluctant support from a succession of Governor’s and Legislative leaders to develop and fund a range of family support services that allowed these families to keep their children with “special needs” at home, and then they fought some more to get their children integrated into the community with the help of special needs programs in the public schools and supportive work programs.

        <

        p>They haven’t finished building, reforming and repairing and integrating this system of community based and institutional care …….yet.

        <

        p>Right now they are waging a defensive campaign to stop 9C cuts and at the same time urging their Governor and their legislators to look at finding new progressive revenues sources that might be found in the Tax Expenditure Budget.

        <

        p>As for the downgrading by our Republican friends in the BMG community, thanks but I don’t care and you should repress the negative energy and cultivate your positive energy by ignoring them and giving me your 6s.

        <

        p>As to the cost of the SHNS, this is a small business that provides a very valuable service and these folk do have to earn a living don’t they? I am happy to report that their stories are increasingly to be found in the MSM including the Globe, the Herald and the Wickedloyal chain. And you can find all those budget cut stories on our own ONE Mass News Roundup.  

        • Again, this is not a thread about services. It’s about taxes and making money.

          <

          p>As for taking and spending money, I refer you to every other blog post on this web site.

          <

          p>

          • Revenue Committee Co-Chairman Rep. Jay Kaufman, who convened the meeting, said the aim of the listening tour is to facilitate a conversation about how best to structure the state’s tax system and end the cyclical budget crises that lead to program cuts like those likely to come from the governor’s next round of 9c cuts.

            <

            p>

            To Judy:  A) What are the services the Arc and others listed above are fearful of losing?  B)  Why do the services in A matter, and why should/must government provide these services.

            <

            p>Deb and Seascraper as you both well know, our government doesn’t have to provide these services at all.

            <

            p>It’s back to the same old same old question every organized group of community builders –nations, tribes, townships, states, cities, even families –ask themselves

            <

            p>What kind of “government” do we want and how do we pay for it?

            <

            p>I suspect each of you would describe a different kind of government and would have very different ideas about and how to pay for it. (Never mind who should pay for what —clean water, fire protection, education, roads, public health, public safety,libraries, food, shelter, safe sex, music, dancing, art……….)

            <

            p>I’m listening to Leonard Cohen right now and he does a good job of articulating my opinion of what government should pay for in this instance: an efficient and effective  continuum of services and programs to help the developmentally disabled people reach their full potential.  

            <

            p>It’s here the family’s broken
            and it’s here the lonely say
            that the heart has go to open
            in a fundamental way
            Democracy is coming to the USA

            <

            p>Or maybe we ought to do what some of our ancestors did and put physically disabled babies (including little girl babies) ……………

            <

            p>Whoops got off topic

          • That’s a perfect example of the cognitive dissonance we often see from conservatives.  Taxes are how we pay for services, so any intelligent and thorough discussion about one side of the equation must necessarily address the other side as well.  We can’t discuss the services we need without talking about how to pay for it and we can’t talk about our tax structure without discussing how any proposed changes would impact the services we pay for.

          1.  Refering me to the Arc website turned out not to be helpful and anyway, did not tell me what services Judy herself would not like to see cut.  Inquiring minds want specifics, not broad polemics.

          <

          p>2.  I don’t “ignore” anyone.  That is just not my style, frankly.  Not advice I will follow now or later, Judy.  Further, I don’t write these folks off, either.

          <

          p>3.  As for giving 6s; Judy you get them from me some of the time but no one gets a 6 from me all of the time.  If you or anyone “always” got a 6 from me that would be pretty meaningless, wouldn’t it?

          <

          p>4.  I agree that SHNS provides a valuable service, especially given the downgrading and eliminating of State House Bureaus by so many of the MSM.  However, I disagree that the small user [a single person such as myself, or a small town library] should always be charged a full price, with no discounted service or sliding scale available ever for anyone.  I am not a lobbyist with “W2” income from a lobbying firm, or an expense account like you are.  I bet if SHNS did provide a discounted or scaled service for users without the relatively deep pockets that your clients and lobbying firm have, that this would be like “found money” and in fact, increase SHNS income.  Anyway, I absolutely cannot afford the minimum going rate, which IS $2500.00.  I am not on anyone’s payroll and as you know, my husband’s job was out sourced to boot.

          <

          p>5.  Yes, SHNS gets quoted more but that is because almost all the newspapers killed off their State House bureaus – a sad day for democracy in my opinion – given the elimination of cable coverage, that means even less light and air on Beacon Hill – which needs more sunlight not less.

          <

          p>6.  Seascraper, YOU did not answer my question at all!  Just what services are YOU, personally receiving that YOU personally are willing to give up [I don’t consider it fair for you to recommend elimination of services you don’t use anyway, or improverish other people’s lives by depriving them of services you do not use or understand.]ve ups seri

          • the line items of all the program and services that knit into the public infrastructures that educate our children, keep our communities healthy and strong, protect our elderly and disabled, keep our neighborhoods safe, stimulate and support the business community, and enable our people to participate in our representative democracy?

            <

            p>In a comment to this diary?

            <

            p>Do you want it alphabetically?

            <

            p>Nah, I gotta finish cooking supper.  

            • What services do YOU personally use – you and I value services that  we don’t personally use – but we know others who do.

              <

              p>I was trying to focus on what you use, and what you care about [two separate topics] not the third – EVERY service you know about or are paid to protect!  Hey, as the judge said to the lawyer, “Answer the question I asked”.

              <

              p>Of course, cooking dinner is more fun then talking about taxes and services any day.  What did you cook?

              • every line item that knits into the public infrastructures that provide the water clean enough to wash the dishes I just used to cook the fish, using the government regulated natural gas to cook the fish, using the roads and sidewalks to buy the fish, to the public health department in this town that inspects the fish store, to the public schools my beloved grandchildren use in two separate communities in this state, blah blah blah……………….I could go on and on.
                I don’t want to spend the time, or use up the space here. Think about it yourself and make your own list. I’m going upstairs to watch Madonna in a League of Their Own on the DVD I got throu8gh the United States Post office.  

          • You’re full of hot air… when did anybody you voted for say they were against elevators at the T? and yet the elevators at the T are effectively unworkable. Obviously you and your candidates can live without elevators at the T.  

      • AmberPaw, I’ve got so many 3s for reasoned comments that were simply deemed “double plus ungood” by the politburo around here. I’m sure she can take it. I also note that you couldn’t respond to the substance of my comment so you get a 4. Tighten it up.

        <

        p>As for Judy’s comment, an observation of her body of work from any altitude leads to the inescapable conclusion that she does not care if all private business is hunted to extinction in this state as long as she’s getting her cut.

        <

        p>Like many of our most frequent posters, she feels she cannot live without government funding of her various consultancies. Many others work in government operations. I do not deny that any of these people do meaningful or even vital work.

        <

        p>However the focus on government first leads to a system of taxation that steadily drives out private activity and expands more wasteful public takeover of that activity. Anyone can see that this doesn’t add up and in the end, doesn’t provide decent service anyway.

        <

        p>For instance, your T elevator rider can’t get a car or reliable private transporation because he or she can’t get a job. Why? because high taxes and high regulations raise unemployment, and a marginal employee only gets a job through competition. The elevators are often hard to find, unsafe, unclean, if not broken. The T itself does not operate on a schedule which supports somebody who needs to be somewhere, such as at a job or home taking care of a child. This is better?

        <

        p>Instead of being heard I am exhorted to demonstrate to pry money out of city government for the public schools or other services with no hearing on how to get more money in the first place, or improve lives so people don’t need so many services.  

        • First, the unemployment rate among the disabled is quite high; the last time I checked, it was over 60%

          <

          p>Also, many of the MBTA stations NEVER had elevators and were build long before the ADA – there is a very, very slow schedule for these to be added.

          <

          p>I agree that the T schedule makes it impossible for people to maintain a regular schedule – busses are eliminated without notice, fires shut down trains, etc.

          <

          p>The issue is failure to maintain infrastructure, not high taxes.

          <

          p>What you call “services” I call infrastructure.  In my opinion, there IS a collective responsibility to maintain infrastructure AND modern business and commerce withers when infrastructure crumbles.

          <

          p>Also, in my opinion there is also collective responsibility to have the stronger [and that includes the stranger financially] protect those who are weak.

          <

          p>Or would you prefer A Modest Proposal for dealing with the problems of the destitute and their children?

          <

          p>The issue is not taxation but prioritization and I cannot figure out what YOUR priorities ARE!

          <

          p>Negativity doesn’t improve the economy either; there needs to be concrete planning and comprehensible priorities.

          • There are inadequate elevators now in spite of years of you voting the way you do.

            <

            p>You would have more elevators under my system which produces more money for public spending than under yours, which is in constant crisis.  

            • Even reading all ALL of your posts, together, I cannot see a “system” that produces money for public spending.

              • me: lower taxes on higher wealth (shrewsbury)
                you: higher taxes on lower wealth (worcester, boston)

        • when the economy crashed. The economy crashed during a period of deep tax cuts for corporations and the wealthy. The trickle down model failed. As money accumulated at the top instead of circulating through the workforce, consumers were driven towards easy credit. A credit driven economy is unsustainable and soon reached a breaking point. Consumers/workers ability to continue paying and buying led to bank failures and a precipitous drop in sales. As economic activity slows and warehouses fill, workers are laid off decreasing consumer spending and the swirl towards the bottom accelerates.

          <

          p>Decreasing spending only adds to the economic slow down…that includes government spending.

          <

          p>If the economy continues to slow, tax revenues will continue to decline.

          <

          p>The answer is to maintain and increase government spending. When the economy improves, the debt can be paid down – as following the Great Depression.
          If the economy is a wheel with each part dependent on the healthy functioning of the other, it was the worker/consumer cog that broke and needs repair in order for the system to function again.

          • You berate a private economy which borrows, but your solution is for the government to borrow more. It doesn’t add up. For another year I will be demanded to show up and weep for school money, even though nothing in the city changed to produce more money, and Judy voted for Menino = status quo which doesn’t add up. What does she care as long as she gets her cut, as long as she’s the last consultant standing when Boston turns into Detroit? That’s why I gave her a 3 for her dumb comment.  

      • It is always a good time to cut waste, reduce fraud and patronage, and find efficiencies. You must have gone to the Brookline Tom school of economics.  

  5. Expanding gambling for tax revenue fails the four point League of Women Voters test for new revenue sources.

    <

    p>It is not a fair tax, and it puts the burden on those who can least afford it. 90% of casino revenues come from the slots and 90% of slot revenues come from just 10% of the players.

    <

    p>It is not easy to collect, rather it is one of the bigger challenges, to oversee this industry and running these agencies will eat up much of the tax revenue.

    <

    p>It is not a reliable. We have seen this proven in our neighboring states. Revenues decline and once the industry is ingrained in our system, they garner great political power through candidate support, and come back to ask the state to give up their share of the revenues. Rhode Island is a perfect example.

    <

    p>It is not revenue neutral, this industry eats from other revenue sources, as the limited discretionary spending shifts from the existing businesses and the lottery. Additionally a dollar spent at the casino does not return the same dollar value for tax revenue or to feed the local economy. Expanding gambling is not an economic multiplier.

    <

    p>Keep listening Revenue committee, this is Massachusetts home to Education, Culture and History- there are better ways to solve this problem!

  6. Interesting that Worcester’s residential rate is still higher than Shrewsbury’s (11.5% vs. 9%), and yet Shrewsbury has better services, better stores, more office jobs and better housing. In addition, the workers in Shrewsbury are closer to better jobs, as businesses, even marginal businesses, can take the risk of locating there with the low business tax rate.  

    • How come every time Judy M speaks I feel like all she wants in more and more and more? I wonder if she has ever offered any advice on how a bloated state payroll can be trimmed so that the rest of us can afford to live in this outrageously expense state. Come on Judy, you can do it.

      • What a thought.  

        <

        p>I don’t think I can offer you any advice on cutting the state payroll that would produce any real savings that hasn’t already been offered by others (Mihos’ across the board cuts) or that have not already been implemented by the Governor.

        <

        p>But I would like to hear what you explain how some of the corporate tax breaks outlined in the Tax Expenditure Budget, including the breaks we gave Ratheon and Fidelity to save jobs in Massachusetts have succeeded in keeping those jobs here.

        • I gather Ireland does it.

          <

          p>What about the tax changes Will Brownsberger proposed that never went anywhere?

            • With a ban on plastic shopping bags at Palo Alto groceries set to take effect Friday, all seven of the city’s full-service groceries have already made the switch to offering only paper and reusable bags.

              Clerks at Andronico’s, Safeway, JJ&F Food Store and Mollie Stone’s said Wednesday they are no longer providing plastic bags at the checkout counter. Whole Foods Market, Piazza’s Fine Foods, and Country Sun Natural Foods had already eliminated plastic when the Palo Alto City Council approved the ban in March.

              “We haven’t had plastic bags for about two weeks,” said Dan Berkson, a clerk at JJ&F. “We stopped ordering them probably a month ago.”

              <

              p>as Leonard would say

              <

              p>I’m stubborn as those garbage bags
              that time cannot decay
              I’m junk but I’m still holding up
              this little wild bouquet
              Democracy is coming to the USA

              <

              p>Woops off topic again. Damn

        • tax breaks. There are many examples. We had a discussion after that interview about the effects of setting taxes too low.

          <

          p>There does appear to be a correlation between drastic tax breaks and risky reckless behavior. A higher tax seems to discourage reckless risk as it is difficult to earn back money that may be lost.  Periods of excessively low tax coincide with poor corporate behavior, lack of long term planning and out of control carelessness.

          <

          p>Granted excessive taxes inhibit even appropriate amounts of risk and investment, so there must be some middle ground.

          • There does appear to be a correlation between drastic tax breaks and risky reckless behavior. A higher tax seems to discourage reckless risk as it is difficult to earn back money that may be lost.  Periods of excessively low tax coincide with poor corporate behavior, lack of long term planning and out of control carelessness.

            Granted excessive taxes inhibit even appropriate amounts of risk and investment, so there must be some middle ground.

      • WHAT services are YOU willing to give up that YOU use.

        <

        p>Further, THIS state is 47th in support for public higher education, and only 38th in taxation [or have we moved into the 40s somewhere folks] based on per capita income.

        <

        p>WHAT are you comparing MASS to to call our payroll a “bloated state payroll”  Back it up please.  Otherwise, you have zero credibility and sound like a troll.

        • 1)Toll collectors on the Mass Pike
          2)State pensions-replace w 401k/no match
          3)Mandate GIC for ALL municipal employees
          4)flagmen on job sites instead of cops
          5)part time legislature
          6)mandate regionalization of all fire departments across the Commonwealth
          7)early retirement incentives for overpaid state and local officials
          8)analyze every state budget looking for waste, corruption, fraud, hacks, etc., etc. etc.
          9)eliminate all unfunded mandates passed to to local government by the Commonwealth

          • I can’t believe I’m bothering to respond to you.

            <

            p>We are discussing a ONE BILLION DOLLAR deficit. That’s a one with nine zeros after it:

            <

            p>

            $1,000,000,000

            <

            p>Let’s take your first example, “Toll collectors on the Mass Pike”. From various sources like this (not exactly friendly to toll collectors or Democrats) we learn that (emphasis mine):

            The toll collection department had 643 employees, both full and part-time and their average pay was $41,582. Total cost of toll collectors pay was less at $26.7m than the cost of cops at $29m.

            <

            p>Suppose we did your item one. Here’s what we’ve accomplished: 

            $1,000,000,000
  - 26,700,000
 -------------
   972,400,000

            <

            p>Great job, Purple. You accomplished a reduction in the deficit (not the budget) of 2.76%. You’ve reduced the deficit to only

            $972,400,000

            <

            p>2.76 percent down, 97.24 percent to go.

            <

            p>Instead of blowing smoke and calling participants obscene names, why don’t you try doing some homework for once?

            <

            p>Put some numbers on your proposals, along with some sources.

            <

            p>I want to see where you make even a measurable dent in the deficit by cutting more spending.

              • How many “tens of millions”?

                <

                p>Two? Three? Eight?

                <

                p>Even if you get it to ONE HUNDRED MILLION, you’re still only at TEN PERCENT of the deficit.

                <

                p>Do your own arithmetic.

                • Dumb ass or not, I’m smart enough to know that you haven’t been able to come within even TEN PERCENT of the deficit target.

                  <

                  p>I guess you’re just not a numbers guy, huh Purple?

                • That’s about $400k on avg per community. Not a nickel out of the state budget. Just pure savings if you mandate the GIC. You don’t understand that $400k pays for lots of cops and fireman and firewoman. Stupid liberals!!!

            • The eyes are always bigger than the wallet. Everything government can collect it will spend, and still it won’t bring the low up to the living standards of the high, so you as long as you place the responsibility for social equality on the government, you will always have to demand higher taxes.

              <

              p>The “third way” added business innovation as a government responsibility. So now the government can tax certain successful ventures to and give the money to other (so far unprofitable) ventures. But there are a million ideas about what’s going to be the next hot new sector. By making investment a responsibility of government you make another horizon that will accept limitless funding, and limitless taxation.

              <

              p>High taxation creates more needs, by making more people destitute. More alcoholism, more gambling, more wards of the state, old, children, criminals. Nobody wins, except the providers and their consultants. That’s why I can’t spend much time listening to their input in these areas, they have a conflict.  

      • Judy’s has her hands in my pocket

        <

        p>You have as much influence as she does over tax policy and if you don’t, it’s your fault not hers.  

      • Massachusetts is approx 40th in taxes and also lacks a progressive income tax.
        I did a great interview with Noah Berger, Budget & Policy Institute, and Jay Kaufman about a month ago on tax myths and facts. Wish it was more than 30 minutes, so we could have gotton more into the benefits of a progressive v regressive taxes.

        <

        p>Noah and Jay offer some good information: http://www.blip.tv/file/2548165/  

    • Better services and infrastructure create a better atmosphere for business to succeed. Thank you for making the point clearly!!

  7. How about a new committee. It will be a committee charged with finding efficiencies, fraud, waste, patronage, etc. Put Judy M in charge. Never happen…

  8. According to this report from 2006, approximately $1.25 TRILLION will pass from one generation to the next over the next 50 years:

    In the next 50 years, approximately $1.25 trillion is expected to pass from one generation to the next in Greater Boston. Of that amount, $297 billion will go to the government in the form of taxes, $739 billion will go to heirs, $47 billion will be spent on estate fees and $172 billion will be donated to charity. An additional $187 billion is expected to be given as charitable gifts during the lifetimes of members of this generation. That unprecedented scale of giving-almost $360 billion in total-will transform philanthropy in the region, according to research by Paul S. Schervish and John J. Havens of the Center for Wealth and Philanthropy at Boston College, commissioned by the Boston Foundation.
    …
    According to Schervish and Havens, the total wealth of households in Greater Boston was almost $1 trillion in 2001. That amounts to an average of $498,000 per household, about 25 percent more than the national average of just under $400,000. The median household wealth in Greater Boston is almost twice as much as the national median-$172,000 here compared to $89,000 nationally. Not surprisingly, given those numbers, there are more millionaires in Greater Boston than in the United States as a whole, although at the very highest level of personal wealth, Greater Boston lags slightly behind the national average.

    <

    p>Later in the same piece:

    In that highest tier, according to Forbes magazine’s 2005 listing of the 400 richest individuals in the country, Greater Boston includes 11 people with a collective net wealth of $35.2 billion-a small fraction of the aggregate personal wealth in the region. The concentration of wealthy individuals has important implications for philanthropy, because they tend to give a larger part of their personal wealth to charity

    <

    p>This $1.25T generational transfer, over 50 years, is an average transfer of $25B per year each year.

    <

    p>Massachusetts can plug its deficit by taking an additional 4% of this annual amount.

    <

    p>When the average is $498,000 while the median is $172,000, that means that the wealthy (those above the media) are a lot higher than their counterparts on the lower tail. The short form of this message is:

    The greater Boston area is wealthy

    <

    p>We call ourselves “progressives”: I think that means we should advocate TAXING THE WEALTHY. I call eleven people with a collective net wealth of $35.2 billion “wealthy.”

    <

    p>We should significantly raise the estate tax for those whose estate is more than, say, $1M. We should be focused on wealth, not income, and we should stop being shy about taxing the transfer of wealth.

    • I am a big proponent of federal estate taxation, perhaps with an increased exemption amount. (The current federal exemption for years after 2010 is $1 million; there are proposals out there to set this at $3.5 million). I think there are two problems with your proposal.

      <

      p>First, I think you overestimate what a million dollars means. Suppose I earn $100,000 per year and am the sole wage-earner, and suppose I have a spouse and a newborn. So I buy a life insurance policy, say a $1 million policy, to provide income replacement. If I die tomorrow, and my spouse can earn 5% on the $1,000,000 for the next 18 years, by my calculation I could replace approximately $85,000 of my income. That amount will be less, of course, if my spouse decides to pay off the mortgage or put money aside for college.

      <

      p>Should this be a taxable estate? Well, maybe–the Massachusetts exemption today is in fact a million dollars. But my point is just to say that there is a difference between real wealth and a number like a million dollars. (I’ve oversimplified my example, because for both federal and Massachusetts tax purposes, a well-advised person could defer or avoid tax on the million-dollar policy altogether, by using a complicated rigamarole with trustees and lots of sealing wax).

      <

      p>Second, the US government taxes US the estates of US citizens no matter where they live in the world. Massachusetts doesn’t really have that luxury. Massachusetts’s estate tax already exceeds the federal “sponge tax” limit, because Massachusetts did not adopt the federal increases to the exemption amounts after 2001. (This will change if the sunset provisions of the 2001 tax law are allowed to go into effect, in which case federal law will come back into sync with Massachusetts law). There are perhaps not too many people who will give up their citizenship and live abroad to avoid federal taxation. There are probably many more people who would move to a neighboring state to avoid taxation at death.

      <

      p>TedF

      • I suspect we can name them. Together, they have a collective net worth of $32.5 Billion.

        <

        p>You talk in the abstract — I’m talking in the specific. I think we can dramatically raise the state estate tax. I think it wouldn’t hurt if folks started naming names, especially of “patriots” who flee the country or state to avoid paying a minuscule (4%) estate tax. I note that Haliburton (the family business of Mr. Cheney) has relocated its corporate headquarters to Dubai. Apparently we aren’t doing enough to keep these “patriots” here.

        <

        p>I don’t doubt that there are wealthy residents who value their greed and their estates above all else. I also don’t doubt that its high time we start calling them out, and perhaps begin a higher profile discussion of the obligations that come with great wealth.

        <

        p>

        • about Rose Kennedy’s estate being probated in Florida. Is that what you mean when you say “”patriots” who flee the country or state to avoid paying a minuscule (4%) estate tax.”?

          • While I’m not sure that the Kennedy’s make the short list of “wealthiest Americans who live in the Greater Boston area”, the example you cite is precisely what I mean.

            <

            p>It would be helpful if you might provide the relevant estate tax specifics — how much did Florida collect, versus Massachusetts, how much was taxed, that sort of thing.

            <

            p>In my view, scrutiny of current Kennedy family tax decisions (along with every other wealthy candidate) is fair, constructive, and helpful.

            • Brookline Tom:
              Isn’t it true that Florida has no estate tax? If I am correct even you can figure out how much Floida collected from the Rose Kennedy estate. How much will MA collect from the Ted K estate? Then again, taxes are for other people to pay.  

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