By the time my Easter
lily begins to fade and my chocolate bunny is gone, we may know the
full fate of Gov. Deval Patrick’s $1.9 billion tax increase
proposal, which is presently being sniffed and nibbled on Beacon
Hill. Not that there’s anything sweet-smelling/tasting about a tax
hike.
New spending on
transportation and education proposals in the governor’s fiscal year
2014 budget depend upon new revenues. Speaker Robert DeLeo and
Senate President Therese Murray had a joint news conference
yesterday supporting roughly $500 million more: a 3 cents-per-gallon
increase in the gas tax, adjusted for inflation in the future; a
$1-per-pack increase in the cigarette tax; and application of the
sales tax to computer system design services and utility
classification.
Last month, the Joint
House/Senate Revenue Committee held a hearing on the governor’s
taxes, including his increase in the 5.25 percent income tax rate to
6.25 percent. Some income tax hike could still be included in the
House budget, due out next week.
Chip Faulkner was
at the hearing to testify for bills reducing the income tax and
sales tax rates to 5 percent: a nicely “balanced approach.”
Good thing he was
there, since the mayor of Springfield showed up with a brand-new
attack on Proposition 2˝! Because Mayor Domenic Sarno wants one of
the proposed state casinos to be built in Springfield, he’s asking
for casinos’ property taxes to be exempt from the Proposition 2˝
levy limit, letting those taxes take the tax rate above the 2.5
percent ceiling.
Dangerous precedent. I
can hear a logical argument that a casino is just another business,
so if it is exempt, why not all businesses? Why not an industrial
park, or a Walmart? Chip was quick to point out that Springfield has
been one of the most mismanaged cities in the commonwealth, which is
why its tax rate is sitting right on that 2.5 percent limit in the
first place, unable to count the casino taxes as new growth.
Chip also pointed out
that Massachusetts is not suffering from a shortage of taxes.
According to the nonpartisan Tax Foundation, our state and local tax
burden is still fourth-highest in the country, 31 percent above the
national average.
Yesterday, the Tax
Foundation released its
annual Tax Freedom Day report. On April 18, 2013, taxpayers in
the United States, as a whole, stop working for their federal, state
and local government and begin to work for themselves. In
Massachusetts, the date is April 25 — the fourth-latest in the
nation.
Yet, we don’t
adequately maintain our roads and bridges or run the MBTA with
transparency or efficiency. We don’t keep track of welfare
recipients’ electronic benefits cards. The state inspector general
has told us that the commonwealth can’t prove the eligibility of
roughly 33 percent of children receiving welfare benefits, doesn’t
know if any of them are in school, if they are even in the state, or
in fact if they exist at all.
During the House budget
debate later this month, Republican and reform Democratic
legislators will try to address some management issues with
amendments. The Republicans are expected to resist any new taxes.
Gov. Patrick is scheduled to push his full package at another
Statehouse rally today, this one organized by a group called Stand
for Children. Maybe it can find all those children who are getting
benefits?
Speaking of children,
someone noted on
my April 1 Facebook page that “Obama has declared April the
month in which his administration will teach young people ‘how to
budget responsibly.’” I think this was an April Fools’ Day joke.
My favorite April 1
joke was a news release from Washington-based Americans for Tax
Reform.
“Berkshire Hathaway
Chairman and CEO Warren Buffett today announced he had written a
donation check to the U.S. Treasury in order to personally comply
with “The Buffett Rule.” ... Championed by President Barack Obama
and congressional Democrats, the Buffett Rule is a proposed 30
percent tax on all income over $1 million.
“The Oracle of Omaha
will personally unveil a 3-foot-by-6-foot donation check at an
afternoon press conference on the Treasury steps. According to a
statement released in advance of the event, Buffett said, ‘my
friends and I have been coddled long enough by a
billionaire-friendly Congress. It’s time for our government to get
serious about shared sacrifice. Today, I, Warren Buffett, am
personally getting serious about shared sacrifice.’
“The White House
praised Buffett’s action. ‘Let me be clear,’ said President Obama.
‘This puts to rest any GOP-driven allegations that Warren Buffett
was a hypocrite on the tax issue or was just engaging in a bit of
moral preening.’
“Because the federal
tax code is already steeply progressive, the Buffett Rule, if
enacted, would raise just $31 billion in tax revenue over the next
decade, according to the Joint Tax Committee. To put that in
context, that is less than one-tenth of one percent of federal
spending over the next 10 years.”
Very funny; sarcasm
remains my favorite kind of humor. You can hear ATR leader Grover
Norquist on April 13 when he is the keynote speaker at the
Greater Boston Tax Day Tea Party Rally from 1 to 3 p.m. on
Boston Common.
