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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Thursday, September 23, 2010

Fiscal insanity

Carla Howell is right about one thing. There is "government waste, pork, patronage, overspending, and sweetheart deals" in Massachusetts.

Now before my liberal readers have agita and my conservative readers welcome a wayward child to the flock, Howell is wrong that the solution is to chop the sales tax from 6.25 percent to 3 percent.

For starters, Howell is beyond hyperbole in declaring the evils amount to "tens of billions" in a state that spends about $30 billion. Unless you consider education and public safety to be pork or patronage.

True, layered within those structures are bad hires of Superintendent So and So's niece as a hall monitor. And there's always the Quinn Bill.

And that's the point. Excess spending is layered through municipal and state spending like fat marbling a fine cut of meat. The sales tax rollback is a guillotine chopping off the head. Wrong tool for the wrong job.

The Massachusetts Taxpayers Foundation is right to label their report on Question 3 "Heading Over a Cliff." After the significant cuts of the last few years -- and the restrictions on where cuts can be made -- Massachusetts would head straight over the edge.

Without an available rescue team.

The unspoken 800-pound gorilla of state spending -- and a place where attacks on waste could be targeted -- is an obscure section of the annual spending plan called the tax expenditure budget. It details where declining state personal, corporate excise and sales taxes are spent, or rather not received -- whether it's the sales tax clothing exemption or the motion picture tax credit.
Tax expenditures are provisions in the tax code, such as exclusions, deductions, credits, and deferrals, which are designed to encourage certain kinds of activities or to aid taxpayers in special circumstances. When such provisions are enacted into the tax code, they reduce the amount of tax revenues that may be collected. In this sense, the fiscal effects of a tax expenditure are just like those of a direct government expenditure. Some tax expenditures involve a permanent loss of revenue, and thus are comparable to a payment by the government; others cause a deferral of revenue to the future, and thus are comparable to an interest-free loan to the taxpayer.
Picking through those exemptions to eliminate provisions that have outlives their usefulness or unfairly benefit individuals or corporations would seem a saner approach than a guillotine.

And speaking of special interests, the same notion should apply to Question 1, which would eliminate the sales tax on alcohol In this case, the special interests are the package store owners who want to chop another $110 million out of state coffers so six-packs could cost a few pennies less.

Times are indeed tough, but I'd rather plunk down the extra change. Who knows, it may even make sobriety checkpoints unnecessary and save a few bucks that way.

Wishful thinking.

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2 Comments:

Anonymous Anonymous said...

As I sit here eating my peanut butter sandwich which I bring to work everyday (and have for the last 2 years) I contemplate whether state government feels my pain. I don't think so. So even though it may seem like a 2x4 to the head when only a twig would do, I'll vote to reduce taxes anyway possible. State cops get paid well, they even make bigger money working their details. When they figure their pensions did you know that their pension totals are calculated based on their salaries and include the amount they got paid working the details? I haven't independently verified that, but that's what I was told by a cop, that's too much.

September 23, 2010 12:33 PM  
Anonymous Joel Patterson said...

See, Anon, eating a PB sandwich is a smart way to save money: you don't hurt yourself by that choice and you save money.

But if you were to "save money" by getting rid of your car when the car is the only way to get to your job, then that would end up costing you.

But if you drastically lower the sales tax, then you create overcrowded prisons that become criminal factories. You overcrowd classrooms, and then the next generation has less education to help them earn money (and pay taxes). You deny preventive healthcare by eliminating the Connector, and you get more people dying earlier from diseases.

September 23, 2010 10:13 PM  

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