Friday, January 27, 2012

Taxation by Polling?
So roll back the income and sales taxes.

Re: Governor Patrick’s new taxes – imposing the 6.25 percent sales tax on candy and soda, another hike in the tax on cigarettes.

Governor Patrick’s $32.3 billion budget proposal is almost two billion more than this fiscal year's – before "supplemental budgets" are considered. Already many hundreds of millions have been added to the $30.6 billion FY12 budget. How much more will be added to his proposed $32.3 billion?

The governor’s latest budget bill continues the tradition of ever more taxes to support increasingly unsustainable spending.

His defense for removing the sales tax exemption on soda and candy, and for adding a nickel deposit to bottled water and other bottled or canned drinks, is that “polling” supports the imposition.

In 2000 the voters overwhelmingly said to “keep the promise” and restore the income tax rate to 5%. A few years ago polls showed that voters would have restored the sales tax rate to 5%, though not to 3%. Therefore, adopting “taxation by polling”, the state should be cutting income and sales tax rates toward 5 percent.

Hiking the tax on cigarettes once again is more complicated. Last year smokers paid over half a billion dollars in state excise and sales tax alone for their cigarettes. As the immutable “law of diminishing returns” continues to reduce the number of smokers – the stated goal – maintaining this vast revenue source requires perpetual tax increases on that dwindling target, as long as any smokers remain.

Government shouldn’t rely on tobacco revenues for essential services. If state taxes and programs discourage smoking – a good thing – the revenue collected from smokers will vanish, and other taxpayers will be expected to pick up the slack.

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Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    508-915-3665