Thursday, January 17, 2013

Gov. Deval Patrick –Tax Hikes on Income Tax for those Working – Sales Tax Decrease for those Not Working – “But government has a role to play in helping our citizens help themselves”





The State of Massachusetts - might expect, yet another exodus image from biotechstart.org

Governor Deval Patrick has been extremely busy these past few weeks, first proposing changes to the State employee retirement benefits, and consolidating State Government agencies, to name a few. The fact that the Governor was going after one of the Democrats “holy grails”, i.e. state employees and their unions, was a bit shocking, as it is not the nature for a tax and spend Progressive Democrat (as opposed to a Democrat, who might be fiscally or socially conservative) not to have something else up their sleeve. The nature of man became apparent when he delivered is “State of the State address. The full transcript of the speech is available here, at theBostonglobe.com. In his speech, Patrick outlines plans for more funding on K-12 education (nod to the teachers union), and an overhaul of the public transportation system to include the South Coast and Western Mass., so that they may take advantage of the state’s prosperity. In his remarks, the following statements were made:

“Now, hear me clearly. Government is no substitute for the private sector. Nothing can replace private initiative and personal ambition. Business, not government, creates jobs. But government has a role to play in helping our citizens help themselves. That’s why investing in education and infrastructure -- together, through government -- is so important to generating private sector growth. But in our schools and in transportation, there is unfinished work”.

….

Because we all have a stake in that future, we should all contribute to paying for it.

In my budget, I will propose that we cut the sales tax from the current rate of 6.25 percent to 4.5 percent and dedicate all the proceeds to a public works fund. That fund will support the transportation plan I have laid out -- both our existing responsibilities and the necessary expansion projects -- as well as the school building fund and other public infrastructure. Under my plan, sales tax proceeds would be off limits for any other purpose.

To support our education initiatives, my budget will propose that we increase the income tax by 1 percent – age point - to 6.25 percent. To make that increase fair to all according to their ability to pay, I will propose that we double the personal exemptions for every taxpayer and eliminate a number of itemized deductions. Making those changes gives us a tax code that is simpler and fairer.”
(Transcript from the Bostonglobe.com)

What stands out in these statements?

“Government has a role to play in helping our citizens help themselves.” – In reality, government has a role, but helping citizens help themselves isn’t one of them. From the Constitution of the Commonwealth of Massachusetts:

“The end of the institution, maintenance, and administration of government, is to secure the existence of the body politic, to protect it, and to furnish the individuals who compose it with the power of enjoying in safety and tranquility their natural rights, and the blessings of life: and whenever these great objects are not obtained, the people have a right to alter the government, and to take measures necessary for their safety, prosperity and happiness.”


The Governor’s next interesting quote: “Because we all have a stake in that future, we should all contribute to paying for it.” This sounds fair and reasonable enough, however, taxpayers in the Commonwealth are those who are working, and subject to both burdensome state taxes and increasing the income tax rates will do nothing but drive those working over the Massachusetts border. (See 2010 census whereby Massachusetts lost such a huge percentage of his citizens that the state lost a Congressional Seat – destinations: New Hampshire, Texas, the Sunbelt, anywhere there is fewer or lower tax rates and jobs that do not exists in Massachusetts on a scale that would support the entitlement programs in place.

Finally, The governor’s plan to cut the state sales tax by 2% to increase revenue and solely fund the transportation program sounds wonderful, however, with the decrease in income due to tax increase in the state, the inflation in food (meat, wheat products, sugar products) that is due to hit all states, and the taxes associated with the Federal Health Care plan, let alone the State plan that has driven health insurance premiums to the highest level in the nation, 2% won’t cut it. One might think that there would be more spending in the state, from other states nearby, which may be the case, however, will that spending be enough to fund this billion dollar project without the need for additional taxes?

The increase to the State Income tax, with closing loopholes and increasing personal exceptions, would make a more fair tax system, however, it is not entirely apparent that the economy here, or in the balance of the country (sans Texas and similar states) can support any income tax increase.

Of note: when reading the end of the transcript, the Governor refers to the tax increases as a “show of political courage” as it is not a popular thing to do.

There is a reason why the affable former Senator from Massachusetts, Scott Brown, is not rushing into a contest for Senator Kerry’s possible seat – there is a better position, within the Commonwealth for Brown, as Governor. With his legislative history, in both the Massachusetts House and Senate and then the Federal Senate, he has proven to be fair minded and non-partisan, and above all, a man with common sense. With a man of such caliber at the helm of the Commonwealth, one could be assured that there were be less concern for legacy and cronies, and more concern for the people as outlined in the Commonwealths Constitution. It is hoped that he has not washed his hands of the political arena, and asking the man to serve in this capacity, given that the burden of taking on the office of the Governor of this Commonwealth, given hit’s corrupt political history, and it’s overwhelming one-party rule, may sound harsh, however, the Commonwealth is in dire need of true reform. In speaking of the Commonwealth as a resident, to one who is not, the fact that taxes are consistently rising and the State government believe itself to be “helping the people, help themselves”, is contrary to the history of the Great State – the struggle of the colonist against the heavy burden of taxation by their British King, to have the right to pursue their own destiny, with a limited government, appears to have, at the present time, been for naught. Any public servant should be reminded that it is those that work, and those that contribute through their own successes to the government so that it may survive. Without the taxpayer, there is no government.

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