CLT likes the freeze in the unemployment
insurance rates, though we would prefer that it be a
permanent reduction, with U.I. reforms attached.
Still, a good thing for the economy.
We support the phase-down of the corporate income tax rate,
but we have seen this sort of thing before: when the
Legislature phased-out the capital gains tax in return for
business support for a legislative pay raise, then increased
the tax again later. Not to mention the "temporary"
freeze on the voters’ income tax rate, six years old and
counting. So we would warn the business community not
to compute the rate freeze into its five year plans.
The loopholes will, however, be closed forever, which is as
OK with CLT as the attack on our rollback has been OK with
Big Business.
We oppose the cigarette tax increase. We would also
warn that the increase in the cigarette tax will not fund
the new health insurance law for long. If smokers use
such a large hike as incentive to quit, return to shopping
out-of-state, and/or die, the revenues will decrease and
cigarette taxers will be looking to the income tax for
revenue replacement. (Proponents say that increased
taxes don’t discourage smoking; if this is true, increase
them $100 a pack and fund lots of things!) Before any
more taxes are raised for the health insurance law, we
should see the cost reductions we’ve been promised.
BTW, did everyone note the new study from the Netherlands,
showing that smokers are less of a drain than non-smokers on
the health care system because they die sooner? So if
we are going to place an unfair tax burden on these
unfortunate addicts, we should at least stop saying that we
do it because of their "cost to society." The state
should also stop pretending it hopes that the higher taxes
will encourage smokers to quit. If all Massachusetts
smokers were to quit overnight, the state would lose over
$400 million dollars. Why not be honest and use some
of the new revenue for ads encouraging young people to
start smoking for the good of state services?
We do look forward to more detail on the House Leadership’s
proposed reforms.