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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 24, 2013

Untapped treasure

Deval Patrick managed a few more surprises in his fiscal 2014 budget -- sales taxes on candy and soda. But the new spending document was largely silent on a cache of revenue almost as big as the $34.8 billion plan.

The bad news about higher income tax rates and an expanded sales tax did not extend to the tax expenditure budget, the $26 billion (in fiscal 2013) pool of that represents dollars the state is entitled to but does not collect because of tax breaks or special legislative actions.

Scroll through the 96-page document and you will see millions of dollars foregone on the income, corporate and business taxes. It can range from medical expenses to earned income tax credit -- to the much-debated film industry tax credit that the Globe notes was one of the only "losers" in the governor's budget because it was capped.

A look at the federal budget would find similar breaks. Remember that amid the minutiae of the "fiscal cliff" deal that did not include an extension of the 2 percent Social Security and Medicare payroll tax -- a tax hike for most Americans -- was a provision extending a tax break for NASCAR.

The state tax expenditure budget and its federal cousin represent the promised land for industries that have the cash and the wherewithal to hire lobbyists. The tax code is dense and arcane and requires road maps to negotiate, something Mr. and Mrs. Average Citizens cannot afford.

Nor can they afford the campaign contributions that grease the wheels in most legislative bodies.

There has been occasional talk about taking a closer look at who gets what and tighten some of those loopholes, but somehow that talk always gets lost amid the nuts and bolts of the budget and crises du jour.

But as lawmakers ponder Patrick's worthwhile proposals to fix our transportation infrastructure and improve our schools, they ought to consider his plans on how to pay for it. No, not just an up or down vote on a 1 percent hike in the income tax or a 1.75 percent cut in the sales tax.

There remains the nagging feeling that not everyone is paying their fair share and that means digging into the weeds, examining the tax breaks that have favored some industries over another, whether those reasons remain valid and whether or not to end those special deals.

It's a lot more work -- but it is long overdue. And in a Legislature that takes a month to simply get organized, it would be a valuable exercise while twiddling their collective thumbs.

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Anonymous Anonymous said...

Is there a special tax on pot now that it's legal?

January 24, 2013 12:05 PM  
Anonymous Anonymous said...

Amen! Amen!

January 24, 2013 2:29 PM  

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