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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, January 17, 2013

The vision thing

Deval Patrick laid out a bold vision for a new Massachusetts where a well-educated citizenry thrives. But does he have enough clout left to reach the even more eye-popping goal of major tax reform?

That's the $1.9 billion question after a State of the State address that called for not only a larger-than-expected hike in the state income tax but a dramatic drop in the sales tax that would dedicate those resources to transportation.

Without ever saying so, Patrick called for the liberal's unrequited goal of a progressive tax structure not by putting step rate increases into the income tax but by using at blunter weapon with higher overall rates and bigger exemptions for those who earn less.

The Globe chart on the right dramatically spells out how the tax burden would step up by income, with:
... average taxpayers who earn less than $37,523 would see a $100-to-$200 tax cut, everyone else would pay higher taxes. Those who earn more than $102,886 would bear the brunt, paying an additional $3,200 a year in combined income and sales taxes.
To achieve the goal, the Globe notes:
Patrick argued his plan will make the tax code simpler and fairer because he will double personal exemptions and eliminate 45 deductions. His plan ­also calls for changing the corporate tax code to raise $149 million annually. Those changes include ending a deduction for large companies and eliminating a special classification for security and utility firms.
And to sweeten the pot, Patrick talked of bright-eyed four-year-olds who would have a better future through better education and shorter, less-frustrating commutes on better designed, better maintained highways.

But the dream is likely to get drowned out by the tax proposal, which despite today's mild Herald headline isn't likely to get very far.

Because while our sales and income taxes would still be fair and competitive against virtually all of our neighbors it would stand out in even sharper contrast to the Live Free Loader or Die neighbor that shuns broad-based sales or income taxes in favor of nickel and dime (and $100 bill) taxes on booze, butts and property.

For years, the graduated income tax has been the progressives' holy grail and for years it has been thoroughly and unceremoniously shot down. That's because it would require an amendment to the state constitution and those who benefit from the current system have had the wherewithal to mount well-financed campaigns against it.

Patrick's proposal is a grad tax without a constitutional amendment. There would still be a single rate. But as a cushion for those on the lower end, it would offer higher exemptions.

And an even bigger cushion -- one that could be yanked away at any time -- would be a dramatic drop in the state's most regressive tax, the levy on sales. That shows no distinction to income level -- or employment status for that matter.

What was missing from the speech and initial post-game discussion is what about the revenue from that other regressive levy Patrick and lawmakers approved a few years ago as the answer to our fiscal woes: casino gambling. Does this mean those hopes and dreams have already faded? And if so, what does that mean for the latest ones?

As a practical matter, the proposal was dead on arrival. But it will no doubt launch a loud and raucous debate about the quality of life and services in Massachusetts and our neighbors. That alone would be a debate worth having -- and may have been an underlying goal of Deval's Dream Speech.

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Anonymous Anonymous said...

I can see it passing, but our legislature would put an exemption for public employees in there somewhere.

January 17, 2013 8:26 AM  
Anonymous Anonymous said...

7320 dsclitiHere it is, the perfect path. In an overwhelmingly Democratic state (Gov, both houses,most city halls) where a Democratic vision is veto proof, we have a specific plan. Where are the marching bands, the groundswell of support, why isn't the teachers union, police fire hell all state workers carrying their leader on their shoulders marching to Beacon Hill. Special interests can't sink this ship because it's the peoples will. Will it be that Deval inadvertently pulls aside the curtain and we learn that Democrats are really only interested in corrupt cronyism and lining their own pockets like the last 3-4 speakers of the House. Say it ain't so?

January 18, 2013 4:49 AM  

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