Monday, May 18, 2009

They're on a roll now...

I think it is beyond safe at this point to predict that, with somewhat less than the usual hand-wringing, the Senate will this week vote to support the House in its move to jack the Massachusetts sales tax by twenty-five percent. The House moved first, the skies did not fall, and - not incidentally - the phrase, "the House's sales tax increase" has sufficiently permeated the collective mind of those few of us paying close attention. The real question for this week is: what else will they increase?

Today's news roll from the State House News gives a sobering indication of the direction in which the Massachusetts Democratic parade is now marching, pretty much in unison:
(1) Senate budget chief Steven Panagiotakos last week said he expected the Senate to ratify new revenues to hoist the fiscal 2010 budget out of a deep hole, but that he was unsure of the details. Monday's caucus was aimed at consensus, but senators said they could emerge with no clear plan.
(2) STATE RAISING SLEW OF RECREATION FEES: A round of golf and a day at the ice rink are about to get pricier under a raft of fee increases at state-run facilities proposed by the state's recreation agency.
Eighteen holes at the Ponkapoag Golf Course in Canton will cost $27, a 23 percent hike, according to new fees the Department of Conservation and Recreation expects will raise $1.95 million a year.
An hour of youth hockey at any of DCR's 40 ice rinks will rise 9 percent to $175 from $160.
Renting a motor boat to fish on the Quabbin Reservoir will cost $40 a day under a new fee, and parking at the reservoir will cost $6 per vehicle, up from $4.
Overall, 30 fees are on the increase and 19 new fees will be introduced, according to DCR regulations set to take effect early this summer - they will be promulgated on June 12 but may not take effect immediately.
And (3) BUDGET VICE CHAIR SEES SENATE ADOPTING LOCAL OPTION TAXES: The Senate will likely adopt a set of proposals permitting cities and towns to impose higher taxes on meals and lodging, Ways and Means Committee vice chair Stephen Brewer said Monday.
Before the week is out, someone will push a gas tax hike along the lines of Governor Patrick's favored 19 cent bump, and even an income tax increase.

At this point there is no telling how far the Senate (and after them, the conference committee and - finally - Governor Patrick) will go, now that the tax-and-fee snowball is picking up momentum.

This opinion piece in today's Wall Street Journal ought to be required reading on Beacon Hill. Here's the (ahem) money quote:

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

1 comment:

  1. I really wish someone, somewhere, in the mainstream media would point out to these people that sales taxes and gas taxes are incredibly regressive. Everyone chanting "Raise Revenue" wants to do so on the backs of those who can afford it least -- in one of the worst economies we've seen in 30 years. That's just terrific.

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