I've been remiss in my posting for a while. So, what better way to get back on the horse than to ride that horse directly into a political fire?
Let's talk about taxes, particularly the ballot question in Massachusetts proposing that we lower the state sales tax from its current 6.25% to 3%. I argue that citizens of the Commonwealth of Massachusetts should vote No on this proposal, regardless of your political leanings. This is why:
A state has to generate revenue through taxes one way or another. Options include income tax, property tax, corporate tax, alcohol tax, cigarette tax, hotel tax, automobile excise tax, many other smaller taxes, and sales tax. In Massachusetts, income, property, auto excise, and sales are the best known among the typical voter.
Here are some examples of voter ideologies, and why they should all vote No on Question 3.
Voter Opinion: The state should provide the same amount or more services as it does now.
Vote No Because: Any decrease in state revenue will hamper this goal.
Voter Opinion: There should be as few taxes as possible or "I can't afford all these taxes."
Vote No Because: If you want to cut taxes as much as possible, going after the sales tax is not the most effective route. The state income tax is the biggest part of your state tax burden, which costs you 5.3% of all your earned income. The sales tax is 6%, but only on money spent on applicable goods. Your rent/mortgage and groceries, for example, are not subject to sales tax. You spend much less money on sales tax than you do on income tax. Also, for bigger purchases (dishwasher, tv, computer), you can utilize the yearly sales tax holiday in August.
Voter Opinion: MA residents get taxed more than their neighbors (like New Hampshire)
Vote No Because: While it is true that NH residents don't have income tax or sales tax, the MA sales tax is one of the few ways that we level the total tax playing field. The sales tax is paid by everyone buying goods on our fair state, not just MA residents. Consider all the revenue generated by tourists buying Harvard t-shirts and business people eating at restaurants while at a conference. Cutting the sales tax has a larger marginal cost to the state for a smaller marginal benefit for its residents.
Tomorrow is election day. Don't know where you vote? Look here. Go vote, and vote No on Question 3 in Massachusetts.
Monday, November 1, 2010
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