State Auditor Debate Video (12 October 2010 Rappaport Center)

See it at http://www.rappaportcenter.org…

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p>or go to the Rappaport Center home page at http://www.rappaportcenter.org/ then click on Public Policy Programs/Past Programs

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p>Enjoy!

I posted a question to Nat on his post on GMG about his proposal for a progressive income tax system in Massachusetts. I realize that as auditor he would not be able to change the way the tax system is implemented.  However, he could certainly promote this idea and validate it as a workable solution to the difficult tax situation we face here, which is that whenever we need new revenue, we always turn to regressive taxes to find it.  So anyway, don’t you think this is a great idea?

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p>My Question:

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Hi Nat, I have a question about one of your debate responses (0.00 / 0)
At about 52:00 you were responding to this question:
“…are there any changes you would make as to how the auditor’s office weighs in on pending legistlation and adresses the impact on of pending bills on cities and towns?”

Your response was exactly what I was hoping to hear, but I have questions about this portion:

“…we could lower overall taxes for everyone under $70,000
if we just reverse the regressive taxes and actually had a dramatic increase in the exemptions the sales tax to make it really reflect 200% of the poverty lever, $24,000 per person, $7500 per child…”

I personally transcribed this so it may not be entirely accurate.  My question is what exemption are you talking about?  The personal exemption we currently take at about $8,000 for married filing jointly? Is that the sales tax  exemption you are talking about?  If that’s the case, then increasing it to over $50,000 for a family of three would flood the middle working class with discretionary dollars and would have a huge impact on growth in our state. I think it’s an excellent idea, if that’s what you meant.  So my question is: is that what you meant?

My other question is about lowering taxes for those making less than $70,000 a year.  I am hoping that our leaders will understand that even people earning up to $150,000 can struggle and live paycheck to paycheck, depending on where they live and what their healthcare and education expenses are.  So while I am absolutely for raising taxes on the highest incomes because that is where all the discretionary dollars are being hoarded right now, I’m hoping that there will be some relief even for those earning up to $150,000.  If not relief, than no increases.  My family doesn’t make anywhere near that much, we are closer to the $70,000 that you mention and we are pinched to the limit, have very few discretionary dollars during the year (whenever we do then some utility, healthcare or grocery cost increase goes into effect usually and takes it right away).  So I guess my question is:  Do you support raising taxes on families earning more than $70,000yr.

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p>Nat’s answer:

personal and dependent care exemptions (0.00 / 0)
Right now, each individual filer gets an $4400 exemption from their state taxes. Couples filing jointly get double that. You also get a $1000 exemption for each dependent. So for a couple with one child, thats $9800.  I proposed to raise that to 2*$24,000 + $7500 = $55,500.  The first $55,500 of that family would be completely free of the state income tax.  So that’s an extra 45,700 tax free.
I picked those numbers because they roughly correspond to roughly 200% of the federal poverty level for MA, a common threshold for determining when a person or family needs support to afford food, housing, healthcare.  Plus, I like the idea of a 24/7 tax plan! Essentially, it is designed to make the exemptions big enough to really reflect the cost of essentials —  food, housing, health insurance, transportation —- so that we are taxing discretionary income, not what you need to live on and don’t have at your disposal to give away!

Now that you’ve more accurately excluded what you need for essentials, you can raise the income tax rate to increase revenues but still give most people a tax break. My back of the envelope estimate says you could raise $1.5 billion in increased revenue and decrease the amount of income tax paid by individuals earning about $70,000 or less. So for two filing jointly, about $140,000 or less. To do a more complete calculation, you need the office of the Department of Revenue at your disposal. Just another reason to vote for Jill Stein!  

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