Increased income tax proposal

1. Thanks for speaking out.

   Here’s the deal: It’s a revenue neutral proposal — it’s not a tax increase overall. On average everyone under $140K gets a cut, with families under $50K going to zero. At about $140K it’s a break even. Above that, it starts to work out to an increase. Click here for more detail.

   For the very wealthiest folks, there would be a net increase and you raise a fair question — would we drive our highest earners out of state? I’m guessing that since they’ll get a deduction on their federal for the increment, it won’t feel like much to them. But that’s something on which we’d need to hear more testimony if the proposal ever got moving. On the economic positive side, putting more money in the hands of the lower earners will lead immediately to more consumer spending.

   I did the homework and made the proposal last fall and walked it around among my colleagues early in the session. For this session, it’s pretty much dead — no one wants to touch the income tax. The hearing happened recently, but I’m not expecting the committee to move the bill.

   1. Good plan! These are tough times, and those who make more should help out those who have less.

2. So in other words, the answer is YES you will increase our taxes. A revenue neutral proposal may sound good from your standpoint but what you are really doing is RAISING taxes on families in your district.

   This is absolutely disgraceful. At a time when our families can least afford the increase you are attempting to take more money from us. Money that we need to feed, clothe and educate our families.

   If you are going to do that at least have the intellectual honesty to say state “Yes, we are raising taxes, in fact we are proposing a tax increase of 40% on many of you.”

   Here is an alternative. Cut spending. The Mass budget had grown by close to $10 billion in this decade alone. Why is this? Do we see $10 Billion in increased services, do we see $10 Billion in benefits to the average family. No. We see waste and spending and poor management.
   You’ve already raised the sales tax and numerous fees? Where will it all end? Before you raise taxes by one more cent I challenge you to review the entire budget line by line and cut the waste…cut the thousands of new State employees that have been added in recent years, cut the inefficient programs that are the hallmark of this State’s government. Cut the State’s spending to the bone so our families don’t have to.

   1. Thanks for weighing in.

      Many families in my district would receive a tax cut under my proposal. In fact, statewide, 80% of the population would receive a tax cut. But you are quite right that some would see an increase and I’ve never sugarcoated that.

      If your alternative suggestion is cut spending and channel the savings to tax relief for those of most limited income, I think it’s something I could agree with in the abstract. I do want to provide relief for working people on the low end of the income scale.

      The challenge is actually finding the places to cut the spending. We cut a lot this year and will continue to need to cut next year. The pressure is on — dozens of programs were cut or eliminated this year — and we’ll continue to work to find waste that can be eliminated.

      1. Will’s idea as pathetic as it sounds is not to come as a surprise. Nobody wants his job (toll collectors make more money than Will with less hassle) and because of that he can keep his progressive base happy by promoting the redistribution of wealth. You can’t change Will’s makeup because he is genuine and he practices what he preaches although some of it seems way out there. What you can do is speak up and tell Parents when you drop your kids off at School or neighbors you see at the Supermarket about what he is trying to do and ask is Belmont better off since he took office. It is time for a change but Who will bring the change and until then just be thankful for the Blue Dog dems being able to quash these ideas. Cycles change in politics and we are nearing the end of the Boomer cycle so there may be change in the air in 2010.

         PS: $140K income may allow you to buy a $500k home in Belmont which is either half a 2 family or a 2 bedroom Ranch on a busy street. So think about the “won’t feel like much to them” comment.

         1. Thanks for weighing in, Paul,

            Just to be clear — according to the (basically dead) proposal, at the 140K level for a family, there is no change in taxes paid or even a slight break. It’s only up at much higher levels that one would feel the full net impact.

      2. Will wrote “I do want to provide relief for working people on the low end of the income scale.”

         Ok Will, Then why would you be in favor of raising the gasoline tax? Who do you think it will effect the most? The person making $250k filling up his Lexus? or the Poor everyday Joe that needs to fill his Minivan to get his/her Kids back and forth to school and then to work? and I feel bad if his/her commute takes him through the tolls! The gas tax would also raise the cost of food and clothing, Truck use fuel too! and who do you think the stores are going to pass that cost on too?

         1. Absolutely fair point. But at least the gas tax is dedicated by law to transportation improvement.

            1. so wasn’t the original 23 cents a gallon we currently pay supposed to be used ONLY for our roads as well as the tolls were ONLY to pay off the turnpike, The excise tax on Autos, Do ANY of these taxes ring a bell? They all were ORIGINALLY “by law” supposed to be used for a specific purpose, But funny things happen up on Beacon Hill. Don’t Ya Think? Just like the income tax increase Dukakass put through as a “temporary” increase.
               is has it been 18 years now?

3. As Will says, “Here’s the deal” Will and the other elected officials on Beacon Hill are’nt doing the job they were elected to do. Remember Deval Patricks campaign? He campaigned on reversing the Mass exodus of “working” people from this state, He campaigned on Middle Class tax relief and Property tax relief. Now once he is elected what you get is more tax and spend. Higher Tolls, Higher Sales Tax, talk of raising the gas tax, Income tax. every week we hear of a new tax being floated.
   what you don’t hear is the “Change” and “Together we can” we were promised. Will, If you said during your campaign that you would raise the sales tax, income tax, gas tax etc.. how many votes do you think you would gotten? My guess is ONE and that would be the vote for yourself.

4. I guess for me this fits into the “You’ve got to be kidding me” category. Wealth clearly drives the creation of economic benefit even for those “disadvantaged” you seek to help. A revenue neutral plan for shifting tax burdens sounds like that plan Karl Marx came up with a couple years ago wealth redistribution. How’d that work out for that Soviet Union place?

   Here’s another economic reality — so-called “high earners” who receive the occasional government “break” as an economic incentive tend to spend it, injecting more business into the economy. This proposal is the exact opposite – you’ll be taking money away from people who are likely to be spending and benefiting the economy and shifting to people who are less likely to create this same economic benefit.

   Wealth distribution does one thing – it discourages economic excellence and competition that has historically benefited our society.

   This plan is simplistic in it’s thinking and would, ultimately damage our economic prospects at recovery.

   Sorry Will, but I, for one, am happy this is dead.

   1. This post in incorrect on many levels. It is small business that drives the economy, providing innovation, and the bulk of jobs. It is not taxes that drive small business out but it is the inefficient use of tax revenues on the government side and poor risk management on the small business side. Companies have a much easier time recruiting and keeping good employees if they can locate in a community with good schools, paved roads and esthetic/functional public spaces.

      On another level, this post is wrong because the author does not get the connection between taxes, education and national defense. A global economy, an ecosystem at risk, and a healthcare system that takes an ever increasing percentage of GDP, requires citizens who can understand complex problems as well as work in a technology based economy.

      The idea that wealthy individuals generate wealth that benefits us all, has got to be the biggest misconception since I don’t know when. Great wealth centralizes power to the benefit of the few. This does not mean that any other system that modulates that is socialism, communism or whatever else people who don’t like government in general will call it.

      I am a senior citizen, own my own small company and am happy to pay taxes so long as they are used efficiently. My selfish reason, good communities keep property values high and provide one element of a quality life style.

5. I am constantly amazed – and apalled – at the selfishness of those with the greatest means. The Bush years benefitted those with money and hurt everyone else. Americans who used to be middle class are being pushed down – and many people – even in Belmont – are desperate. Trickle down economics may make the wealthy feel good but it doesn’t do much for most of us and it certainly builds resentment. One would have thought that the wealthy would want to help; after alll, it is in their interest to have a satisfied and reasonably secure population so that they can maintain their position.

   1. Judith-I do not understand your anger directed against those who may be earning a higher salary than you. Selfishness? Perhaps. Would your mind be changed if you learned the individual earning a 140k donated 10% to a favorite charity? Or used some of those resources to help an elder parent stay in their home? FYI I do not currently make 140k but I aspire to. Also worth noting during the Bush years my salary tripled. Stop the class war rhetoric-there are many of us that still appreciate the opportunities that this country affords each one of us.

   2. The people Judith should really be angry with are Illegal Imigrants that come to this state and take your tax money.
      Not the wealthy that pay upwards of 40% of there income in taxes.
      I make around 30k so every dime I can save counts, so it angers me when I see Illegals or should I say Criminals taking advantage, or when Legislators raise taxes and say “it’s only a cup of coffee a day extra” well I don’t buy a cup of coffee a day because I need to pay rent, buy food and put gas in my car. It also angers me when the Gov or others say how everyone needs to sacrifice but continue spending and hiring. since Deval took office the state payroll has increased by a few thousand employees, State legislators get a 5.5% pay raise, so Judith should be more angry at the selfishness of our elected officials more than Honest working tax paying people making over 140k

6. Perhaps some facts to put next to this important dialogue about what we value as a society.

   Since the mid 1970s, income has stagnated. Although not entirely across the board. The bottom 40 percent has lost ground and seen the cost of living rise and their standard of living go down. The income of the next 20 percent has gained a little ground but only by working longer hours, and with the current economic crisis they’re less secure about their economic future. On the other hand, the income of the top 20 percent, grew dramatically since 1976. But it is the top 1 percent whose incomes are at their highest extreme since the 1920s. (These statistics are easy to check in Forbes magazine, the World Street Journal, the Federal Reserve Bank, the US Census Bureau, etc.)

   The concentration of wealth — assets such as cash, real estate, stocks and other investments, businesses, etc, etc. — is also at its most extreme since just the Crash of 1929.

   So what accounts for these facts? Some argue that these vast inequalities are the result of uncontrolable “market forces” but most folks recognize that policies — the “rules” of the economy, such as tax laws and spending priorities, wage laws and monetary policy, etc., made mostly by people with power, wealth, and influence — shape the economy.

   And it should even be clear to the least informed, that some of the people who campaigned hardest to shrink “government,” once in power, expanded the role and budget of the largest part of government, the military, as well as the criminal justice system . However these same folks — the Bush-Cheney administration with a large supporting cast in Congress — actively worked to dismantle and privatize social investment (housing, education, the environment, the arts, the social safety net for the needy, civil liberties). And when the rapidly growing casino economy blew up, these same folks engineered the greatest bailout of the very people who put the world’s financial system in crisis.

   How can you avoid class war rhetoric when most workers and families are experiencing a class war, and are losing!

   Yes, this country offers tremendous opportunities. We may not be number one in longevity, literacy, or leisure time, but we sure are numbner one in wealth. And in wealth inequality too. We have the highest Gini coefficient, the internationally accepted statistic for measuring inequality, among all the world’s industrialized nations.

   And if one takes a historical perspective on how the vast wealth of the United States was created, several patterns important to this discussion of values emerge.

   As the peoples who had been living for thousands of years on this continent were removed, the seemingly limitless natural wealth was wide open to be exploited. By importing huge numbers of indentured and slave labor, and waves of low-wage immigrant workers, cities were built, forests cut down, cotton, corn and wheat grown and processed, the nation expanded, and wealthy elites contested for power.

   After the Civil War, the industrial revolution ushered in tremendous growth in wealth but it was concentrated in the hands of a few, similar to today. The “Robber Barons” consolidated their companies and bought Congressman and their power grew and so did the poor. The response was the Populist movement of workers and farmers which resulted in new rules, anti-monopoly laws and an income tax in 1913, for example, that leveled the playing field a bit.

   Similarly, the labor movement of the 1930s and the New Deal brought in a whole set of rules, regulatory agencies, and spending priorities, that set the foundation for greater prosperity after WWII for more people than ever before in this country. The Civil Rights movement and the War on Poverty brought some new rules that gave opportunities to workers and families who were previously denied them.

   However, the class war intensified with the election of Ronald Reagan. As Gordon Gecko would say, greed became good, and the folks making the rules, the Congress; the President; and former CEOs of Goldman, Haliburton, Bechtel, Bendix, etc.; and academics from the Ivy League, the Chicago School of Economics, and other elite universities, dismantled or changed most the rules that broadly benefited society including the bottom 60 percent.

   Nevertheless, some of the remnants of the New Deal and the 1960s — Social Security, food stamps, Medicaid and Medicare — are all that’s keeping millions out of extreme poverty.

   Yet even with the real economy and the public sector in severe decline, these same folks — Obama has not stopped the reliance on this group to this point — continue to rig the rules and help their friends continue to live large. The Casino seems to be back in business but people who work for a living still face an unemployment and underemployment rate of 20 percent, or worse in urban and rural communities of color, whether native or foreign born.

   In another time of national crisis and hope for recovery, people with the highest incomes were taxed at nearly 90 percent — the effective tax rate in the decade following WWII. A key social value was that workers and families deserved broadly shared prosperity and sharing wealth more equitably was a way to get there.

   I want to see the US improve its ranking in health outcomes, educational attainment, protection of the environment, leisure time, and retirement security. We need to reduce inequality to do that. An equitable and sustainable economy IS possible, but, in my opinion, it will take a broad-based, multi-race, multi-class, democratic social movement to change the rules.

   1. Steve-Thanks for enlightening me to “what we value in society”. I for one value my family and my freedom or what remains of it.
      While there can be no dispute that the rich continue to get richer, I would submit that raising the income tax, as Will suggests we do, would have little effect on helping those less fortunate. Poverty is a complex manifestation and efforts to reverse it require more than throwing money at the problem. The money is best left in the hands of the people who earned it. I think you and I would agree that government’s record of spending our resources wisely is horrible. You’re right when you state the Casino is open. The biggest Casino is our state government and their saving a place at the table for all their friends. Take a look at my postings on the 2010 budget. Outrageous!
      I’m no statistician or economist but I do know that stats don’t always tell the whole story. You mentioned Forbes as a reference. I decided to take a look at a recent on-line issue. Didn’t have to look far to find support to my theory that the “middle-class stagflation emergency” is bs. Aggregate data shows real income/person increased nearly 80% between 1950-2008. I was always dubious about the “emergency” assertion. Afterall, my financial wellbeing and that of my employees and friends improved dramatically 2002-2008. Alas, all good things must come to an end. I resigned my position last year and am currently making 35% less in salary and contribute nearly 100% more in healthcare premiums. Money is tight for now until the next opportunity presents itself.
      Judith’s and your preoccupation with what other people make/have is a sad commentary on where we are as a society. I understand it but it saddens me nonetheless. Still, I would caution you from referring to people who don’t agree with Will’s efforts to increase income taxes as “selfish” or “uninformed”. Nothing could be further from the truth.-Spencer

      1. I think the point Steve was making wasn’t that real income per person isn’t growing — it’s that its growth is highly concentrated for a select few. It’s possible for real income per person to grow even if it stays even for most people, if it grows very rapidly for the couple at the top.

         Take a look at some of the charts at: http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Household_income_over_time You’ll notice that since 1967, income for the top 5% of earners has nearly doubled while income for the bottom 50% has stayed flat. These numbers are all adjusted for 2003’s dollar.

         This casts a huge shadow on the idea that taxes steal from the rich and give to the poor. To put it explicitly: tax and other laws in the past three decades or so have hugely favored the rich, so the idea that tax laws that slightly pull back from that are hardly theft. Unless you propose that half of the country hasn’t contributed for 50 years, it looks like the rich are benefiting from poor, not the other way around.

         This idea of “selfishness” comes from the American attitude of the lone ranger: he looks out for himself and his family, and everyone else can look out for themselves. That’s an outdated attitude.

         All that said — a lot of those issues are at the federal level, and there’s only so much Massachusetts can do about it. Still, I’m happy we’re doing it, and as someone who’s lucky enough to have a decently-paying job, I’m more than happy to pay my taxes for services that will help everyone, including people who can’t find a job or who have had to take pay cuts.

         1. Yuval, I will concede your point on real income and continue to disagree with your idea that it is government’s role to take from one group of individuals and give it to another. There was a time when that was considered tyranny. Our country was founded on the premise that individuals would be free to pursue their dreams and prosper without government interference. The discord you are witnessing at these Healthcare Town Hall meetings are an indication that people have had enough of government’s attempt to redistribute wealth. Are there inequities in life. Sure. Financial and otherwise. Government should provide a financial safety net but should not be depended on for everything.
            Your explanation of “American attitudes” is inaccurate and insulting. On a per capita basis Amercians give more towards charitable organizations than any country in the world! Do I understand you correctly?: I should feel guilty because my first priority is myself and my family? We would be living in a better country and world if people took their personal responsibilities more seriously. “Outdated attitude”? I pray you are wrong about this.-Spencer

            1. I guess we’ll have to agree to disagree on the role of government in helping the economy. I see the unfettered free market as a system that tends to unfairly concentrate wealth and power, and I see it as the government’s job to provide a counterbalance to that. It seems you don’t — fair enough, and we’ll meet at the polling booth. That said, I think that it’s a hyperbole to imply I think people should depend on the government for everything, given that at the core I’m just arguing that a tax increase from 5% to 6.5% makes sense during a recession, when a huge number of people need that safety net you mention.

               Regarding the American attitude, to clarify, I was talking only in terms of the government. It’s interesting (and to my mind paradoxical) that Americans are incredibly generous on a person-to-person level, but very much not so when working through the government. And to clarify more, I don’t think that it’s wrong to put family as a top priority; I’m just saying that society at large should be a very close second. I also fully agree people need to take personal responsibility, and that definitely has to be built into any welfare, etc we give out. I just think that personal responsibility isn’t mutually exclusive to the government offering a helping hand to the 90% of us who aren’t the recipients of capitalism’s consolidation of power.

            2. It’s not about the money! It’s about government’s intrusion on our freedom. Yuval wrote: “It’s interesting (and to my mind paradoxical) that Americans are incredibly generous on a person-to-person level, but very much not so when working through the government.” It’s hardly paradoxical at all. There is no choice when the government decides your taxes should be increased to pay for a program they deem as worthwhile (e.g. non-citizen’s insurance premiums). An infringement on another person’s freedom (those making more than 140k)should be perceived for what it is-a loss of freedom.
               Check out this animated film from 1948. It’s message is just as relevant today as it was then-http://www.youtube.com/watch?v=u6H63CD7uQA.

7. Tax tax tax tax tax…..Steal from the rich and give to the poor. Let’s see… hard earned money is stolen from people, with the threat of jail time if the tax is not paid, then the money is filtered through the totally wasteful and corrupt Govt hands then dribbled out as token freebies to those who did not earn it building a voting block of those who want to keep the freebies flowing…yea…yea…that makes sense.

   1. Mr. Pratt–it is not stealing when everybody at the table has to chip in for the food bill and the tip. You drive on public roads, rely on police enforcement to deter burglars from robbing your home, enjoy food that is inspected by the government for safety, and type messages on the internet (which was started with government funding).

      On the contrary, when you eat without paying the bill, that’s a little more like stealing.

      1. Mr. Patterson,
         My point went whizzing over your head or you chose not to address the real point. I am talking about a liberal knee jerk reaction to raise taxes when there is soo much waste, red tape, theft, corruption, and redundancy muddying the entire politacal system. “You drive on public roads, rely on police enforcement to deter burglars from robbing your home, enjoy food that is inspected by the government for safety, and type messages on the internet (which was started with government funding).” Everything you just mentioned I agree that Govt has a responsibility to provide to some extent these services. I will even add the fire dept and public schools, and water and sewer departments. But it is also their resposibility to provide these services in an efficient, honest, and accountable way without taking the money we earn and throwing it in the same sewer I am paying for. It’s a pretty basic concept that we would all use in our own homes…”fix the leak in the tub before adding more water to it.” When they take my money and waste it through graft and corruption I do considder that stealing. “the Big Dig” Enough said. I was stolen from and so were you.

         1. Brad-I love the bathtub analogy! How true it is. For me it’s not a conservative or a liberal thing. It’s common sense. This is why I have a problem with Will’s vote on the supplementary budget. Saving jobs for colleagues in the House, the Senate and the Trial Court should not take precedence over the many worthy causes being discussed…it is naive to suggest that his proposal to increase taxes will help those less fortunate. Our elected officials should be cutting the overhead and waste before they consider raising anyone’s taxes!-Spencer

      2. Joel-Just playing devil’s advocate here…whereas the top 20% of wage earners pay 70% of the taxes and the middle 60% pay the remaining 30%; are you suggesting the bottom 20% are stealing?-Spencer

         1. We share the pain, and it’s a lot less painful for a millionaire to pay $1,000 than for a person making $30,000 to pay $30.

            As those wealth-redistributing socialists at the Wall Street Journal wrote: “The top 400 taxpayers have greatly increased their share of individuals’ income since the mid-1990s. The group accounted for 1.15% of total income in 2005….more than twice as large as its 0.49% share a decade earlier.

            ….The average federal income-tax rate for the group was 18.23%….well below the average income-tax rate of nearly 30% back in 1995, when Bill Clinton was in the White House.”
            The people at the top had their share of the wealth grow but their share of the taxes shrink.

            1. The bathtub analogy doesn’t quite work, actually. With a normal bathtub, yes, you fix the leak before you refill the tub — because there’s not a very big consequence of letting the tub go unused for a couple hours. If you need to take a shower and haven’t gotten around to fixing the tub, you’ll probably put down a few towels to soak up the leaked water. And if the tub absolutely has to stay full — if an empty tub would mean people lose their jobs, or can’t afford to buy food, or have to drive on bad roads, or can’t get police/fire protection, etc — then you absolutely keep the water flowing even while you fix the leak.

               I agree this administration isn’t great. At this point, I don’t see myself voting for Patrick if he runs again. But we shouldn’t cut off the nose to spite the face.

8. Will,
   There is an opportunity for us to increase our state tax without a progressive income tax, and that is the 5.85% option.
   In the past, I’ve looked at the 5.85% tax option, realizing it’s a voluntary form of graduated tax in a way, and knowing I could probably afford it, only to shrug it off saying, “Why me? To feed those bandits in the State House? No thanks.”

   This year feels a little different. First, the federal stimulus package as it affects me most directly is to forego my IRA Required Minimum Distribution for the year. This saves me plenty in federal and state taxes, much more than upping my state tax to the 5.85% level.

   Secondly, the Governor and the Legislature, together, came up with some real reforms, specifically: ethics legislation, pension reform and transportation efficiencies. They didn’t do everything they could have. It still irks me to pay those patronage toll takers exorbitant wages. Yet, all of you on Beacon Hill worked together and you deserve credit for what you’ve accomplished.

   Agreeing on a sales tax increase of 1.75% was not easy either, but you did it.

   With the national average workweek down to 33 hours, I know many, many people are really hurting and can hardly afford to pay the standard tax of 5.3% on their diminished earnings.

   So, the 5.85% option is an opportunity to step-up and share the pain. There are still plenty of people in Massachusetts who can afford it.

   I checked with Mass DOR and they tell me only 1500 taxpayers opted for the 5.85% level last year. That’s out of 3,400,000 total, so you can see it’s not too popular to voluntarily pay more than you have to. The .55% difference only raised an additional $135,000 in 2008.

   What do you think? Can we change the 5.85% option from an act of stupidity…. to something to feel really good about?

   1. Thanks, Dick.

      I don’t think it’s reasonable to expect people to throw in extra taxes as an individual choice. For most people who want to make a gift, they want to control how it is spent more directly by choosing a charity with a specific mission. Funding necessary government is something that we need to do together as a commonwealth by setting tax policy through the political process.

9. Thanks to all for weighing in on this issue.

   Just to summarize: The proposal I made was not a tax increase. It was a two part proposal — to cut taxes for everyone, by increasing the personal exemption and to raise taxes for everyone by increasing the tax rate. The net effect of the two measures varied by income level. For those at the lowest income levels, the result would be elimination of the income tax. For the wealthiest few percent of the population, the net effect would approach a 50% increase in state taxes. For people in between, lower incomes would see an increase and higher incomes a decrease, but the effect would be more modest — the break-even point would be about $150K for a family of four. The net impact of the bill in terms of total revenue raised was zero.

   I’m not about soaking the rich per se and the original author’s point about the effect on the business climate is absolutely a fair point and my biggest reservation about my proposal.

   My motive in the reduction is to help the working little guy. The median straight time earnings in Massachusetts in 2007 was just over $38K. Automation and international competition have been driving down real wages for decades and there is no end in sight. Many in this thread have echoed this point.

   We have to give relief to the working middle class but we also have to run necessary government. To those in this thread who say ‘cut spending if you want to provide relief’, I have to agree with you as a matter of real politics. Trust in government is low enough that there is no chance politically for a proposal that raises income tax rates, even if it also raises deductions. My proposal was dead on arrival.

   Our focus in the fall session has to be on continuing reform to regain the trust of the voters. In the spring, we did a lot on pensions, ethics and transportation, but there is much more to do.

10. I’ve lived and traveled in places with higher taxes, and I have not seen the bad effects predicted by opponents to this (revenue-neutral!) tax proposal. I think that their theories about higher taxes on the well-off being bad for the economy are wrong..

    First, there are many choices for tax policy, not just New Hampshire and North Korea. Slippery-slope arguments are bunk.

    Second, we had higher state income taxes in the mid-90s, when we moved here. The economy was improving then.

    Third, we moved here from California, a state with a graduated tax code (top bracket is around 10%, we would pay more overall if we moved there now), and though their state budget is currently in a mess, their economy is huge, and arguably they have poached tech business from us for decades — a progressive tax code with higher high-income brackets did not seem to harm them. Their extraordinarily high property values (about double ours, in an apples-to-apples comparison) indicate that despite their state budget problems, they still have a fundamentally sound economy (their budget problems are caused by a conflicting spaghetti of constraints passed as “citizens’ initiatives” — they cannot increase the income tax or local property taxes without a supermajority vote, yet they are also mandated to spend money in various ways, and also have a prison-filling 3-strikes=life law).

    Fourth, New York State has a progressive income tax, with higher marginal rates. New York City has their own income taxes. They have historically had quite a healthy batch of business there; if a graduated+higher tax rate were business poison, this would not be so.

    Fifth, we have had higher federal income taxes in the past, and the economy grew well enough then.

    From all this I conclude that increasing the tax rate would not be a business disaster, otherwise none of what I have observed would be true. And, further, I conclude that a higher marginal tax rate, is also not a business disaster.

    On the other hand, property taxes are up and rising, and inflation-adjusted incomes for most people have not increased much at all in the last decade. Will’s proposal would give a little bit back to most taxpayers; an actual increase, if we could trust the legislature not to skim too much off the top, would be a lovely thing to send to the towns as local education aid (because education costs will generally rise faster than inflation, so we will need additional property tax relief in the future).

    So can we do better than slogans? We’ve got counterexamples to these taxes-are-bad claims all over the place; as long as we are talking about tax rates that are in the range of what has been done in the past, or in other states, I’m not much inclined to believe that Comrade Brownsberger is planning to ship us all off to work on the collectives. The objections I read above are utterly unconvincing, because I have seen them proved wrong with my own eyes, and even paid the higher tax rates.

    I think we need some tax relief for the bulk of the middle class, and there aren’t too many ways to get it that don’t also explode our budget deficit. This would do it. Most people in Massachusetts, and that includes most Belmont residents, would come out ahead with Will’s proposal. I know that our household would pay more, but I still think it is a good idea.

    1. Thanks, Dave. It still feel it is a good idea, but it’s pretty dead right now!

11. I’m still a bit mystified by the lack of support for raising the gasoline tax. (I much prefer that to the sales tax going to 6.25%.) It’s been many years (several decades?) since it (gas tax) was last increased. Simply following inflation seems justification enough. Perhaps we lost the window when prices dipped last year. Target it for infrastructure, roads, bridges, and public transportation. (of course that would be a temptation for raiding from the legislature) A side effect would be to boost construction industry and bring some of that back as income tax.

    A friend at the the dept of revenue pointed out that in 1990 a much large portion of state revenue came from corp taxes than now. Something like 20% vs 5%. Have all the corp breaks really benefited us? Eg, Fidelity still moved many jobs out of state.

    Dave – I think the Mass constitution prevents a graduated income tax.

Comments are closed.