So as the national
government heads for “the fiscal cliff,” how’re we doin’ in
Massachusetts?
An estimate by the
Heritage Foundation of the impact on each state’s taxpayers if the
“Bush tax cuts” expire shows the average increase per tax return in
Massachusetts falls into the $4,001 to $5,200 range, among the
highest in the nation because of our state’s high personal income.
I’m not one of “the rich,” or even the “typical family” looking at
an increase of $2,200, so except for losing the payroll tax break,
this doesn’t directly impact me: I’m not counting on one of those
rich people to create me a job.
However, we all have to
be concerned about the Massachusetts economy, and what the Patrick
administration will do with the “fiscal cliff” spending cuts that
could impact both our private and public sector. Even before that
happens, the state budget is $256 million in deficit for this fiscal
year, which is half over. This means that the budget for next year,
always planned as an increase on the previous year, will also have
to be cut.
The usual liberal/union
groups are still advocating an increase in the state income tax rate
from its present 5.25 percent to 5.95 percent. Gov. Deval Patrick is
hoping to be able to apply the state sales tax, which he increased
from 5 percent to 6.25 percent, to Amazon Internet sales.
Some Washington
politicians and advocates have been urging the federal government to
raise the federal gasoline tax to pay for increased highway
spending. Some local political, union and business groups have long
wanted an increase in the state gasoline tax to pay to fix the
infrastructure that no one seems to properly maintain here. The
combination hike could be large.
Not to be outdone, a
local coalition of unions/liberal action groups, calling itself
Public Transit-Public Good, has come up with a brand-new bright idea
for raising Massachusetts taxes. At a Statehouse hearing last week,
they pitched a payroll tax on employers to cover all employees who
earn more than $100,000 (the standard for being considered “rich”
seems to be slipping). The money would be used to maintain the
transportation infrastructure, including the MBTA.
According to the State
House News Service, “employers would pay to state government a
percentage of the salary of workers earning more than the threshold,
with the money dedicated to transportation financing. A tax of
three-quarters of 1 percent would generate more than $190 million
annually.”
Inevitably, the pay
level would decrease and the tax percent would increase, until not
just “the rich” would pay this. Fortunately, the Massachusetts
Constitution does not allow a graduated income tax: All earnings
must be taxed at the same flat rate, and my educated guess is the
courts wouldn’t be fooled by this indirect method of graduation.
Advocates may have a
fallback plan though: taxing us all by miles driven. Let’s take a
moment to wonder why the 1990 gas tax increase didn’t maintain the
roads and bridges as promised, why a state with the fourth-largest
per-capita tax burden and the highest per-capita debt in the nation
can’t already afford a well-run transportation system.
Don’t tell me about the
extraordinary cost of the Big Dig. I was around when the Dukakis
administration told us it would cost less than $3 billion, just to
get people to sign on.
Not to seem hostile to
all new taxes, though: Here’s one I like! Rep. Dan Winslow,
R-Norfolk, is filing a bill for a 25 percent tax on the money left
over in politicians’ campaign funds after an election. Right now,
it’s not considered taxable income as they carry it forward to their
next campaign.
“There’s more than $20
million sitting in war chests,” Winslow told me this week. Simple
math: $5 million from politicians instead of more taxes from us. An
added benefit is that it removes some of the advantage incumbents
have over citizens who challenge them.
Other legislators are
working on saving money from expenditures. Fortunately, Rep. Jim
Lyons, R-Andover, wasn’t one of the excellent Republican candidates
defeated in November; he’s renewed his fight to prevent state
benefits being paid to illegal immigrants.
Despite the state
deficit and ongoing legislative opposition, Patrick issued an
executive order last week giving reduced in-state tuition rates to
undocumented immigrant students. Lyons and other Republican
legislators are filing a bill restricting all state benefits to U.S.
citizens and legal immigrants. Last year, they forced the Patrick
administration to admit it spent $270 million on illegals. (See
state deficit, above. And while you’re there, think about this ...)
The Legislative
leadership has just approved pay raises for legislative staffers.
Nothing against hardworking staffers, but you hafta wonder: If the
governor can bypass the Legislature with executive orders, why do we
need legislators at all? We could save the entire legislative
budget!
Never mind; tis the
season to be jolly. I’ve been avoiding Christmas carols since
Halloween, but this week brings Belsnickle, my German hometown’s
traditional holiday beginning. ’Tis time to enjoy Christmas and wish
peace on Capitol and Beacon hills to men of good will and fiscal
restraint.
