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January 18, 2014 / stacieshap

It doesn’t have to be – Taxachusetts or (go) Bust!

fact or myth

I heard a politician recently reminding an audience about the Bay State’s long standing reputation as “Tax-achusetts”.  At one time we were certainly fair game for such comments; like back in the good old days when our revenues were sufficient to meet our needs.  But times have changed, and our overall tax rates have fallen enough to place us right at the center when compared with other states in the union.  TaxComparison

Some might think that being a moderate state, in this particular case, is a good thing.  But making our way to the center has left us battling budget deficits annually for the past 12 years.

To get back on track we don’t need to become Tax-achusetts again, but we do need to consider the benefits of reasonable and progressive tax reform (raising tax rates on our highest income earners).

Here is why this makes sense for Massachusetts:

From an economic standpoint:  Tax cuts in 1998 and 2002 have left us with a $2.8 billion annual shortfall in our budget.  This has meant that instead of investing in the maintenance and improvement of our infrastructure, education, transportation, etc., the state has been forced to cut jobs, services, and vital aid to our cities and towns year after year. LossFromTaxCuts

From a fairness standpoint:  Massachusetts has a regressive tax structure that burdens the poor more heavily than it does the rich.  Currently, the poorest citizens in the commonwealth pay state and local taxes of approximately 9.5% of their annual income, whereas the wealthiest citizens pay closer to 6%. UnfairTax

(To learn more about how regressive taxation is unfair and unsound, watch the following short but informative Robert Reich video: The Truth About Taxes.)

Oliver Wendell Holmes used to say, “taxes are the price we pay for civilized society”. Which leads me to wonder…how do we define a “civilized society” in the year 2014? And also, how do our gubernatorial candidates plan to fund this society?

Over the past 12 years, Massachusetts’s residents have experienced the pitfalls of constant deficits. Now it’s time for our government leaders to focus on putting us back on the road to recovery and prosperity. This can only happen through the implementation of a comprehensive revenue plan that includes progressive tax reform.  And although progressive tax reform will mean higher taxes for some citizens of the commonwealth, it does not mean that Massachusetts will become tax-achusetts again, it just means that we will no longer be Lacks-achusetts.

 

Where the candidates stand on this issue:

Don Berwick is the only candidate who has come out in favor of progressive tax reform.  He will also seek to close loopholes in our tax code, and utilize savings through healthcare reform.

Martha Coakley doesn’t feel that tax reform is needed, but is not opposed to considering it as a last resort.  She believes a tweaking of the system is what we need; more efficiency, streamlining, and shifting money from less critical areas to more vital ones.

Steve Grossman is looking to utilize revenue from the Internet Sales Tax, Casinos, and the enforcement of claw back agreements, but is open to considering income tax reform as long as it doesn’t negatively affect citizens of lesser means.

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Noah Berger of the Mass Budget and Policy Center, comments on Governor Patricks 2014 budget proposal, and the effectiveness of his revenue raising plan, in this Boston Globe article by Michael Levinson :  PatrickBudget2014

 

 

 

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See all posts in Stacie’s Blogging-The-Candidates-For-Governor Series: hmny.me/staciegov2014

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