This essay originally appeared in Boston Globe South - March 7, 2015.
Should the state adopt a graduated income tax?
By Chris Matthews of Scituate, member of Progressive Massachusetts and Treasurer of the Plymouth County Democratic League.
The MBTA is falling apart, property taxes are rising annually, and Governor Baker recently cut desperately needed substance abuse funding to balance the budget. The time has come for Massachusetts to join the majority of states in implementing a progressive income tax to increase revenue and reinvest in our communities.
Today every Massachusetts taxpayer, from CEOs earning millions to waitresses earning $3.00 per hour, pay the same income tax rate of 5.15%. But when we look at the total state and local tax burden, which pays for services, infrastructure and education, the richest 1% only pay between 4.8-6% of their income, while the poorest Massachusetts taxpayers pay 10.1%.
This means we’re overtaxing those least able to contribute while giving a discount to those most able - a regressive tax structure. Instead, we could increase tax rates based on income with a graduated income tax, like our federal tax system, increasing fairness.
Despite our needs and continuing budget woes, our income tax rate has actually decreased, from 5.95% in 2000 to 5.15% today. That’s meant less money for improving education and public transit and local aid, leading to cancelled trains, growing class sizes, and unsafe roads and bridges.
Without a graduated income tax, the legislature has had to resort to regressive measures to balance the budget, like raising the sales tax and reducing local aid [see fig. 1], spurring increased property taxes. These types of taxes hurt the poor and retirees the most. With increased revenue from a graduated income tax, however, the state will be able to slow down property tax increases, reduce the sales tax and fund important services that benefit everyone.
Massachusetts voters have historically used common sense with regards to taxation and funding our communities. We rejected a repeal of the income tax in 2008. In 2010, we rejected a reduction in the sales tax without replacement revenue. I hope that the Commonwealth will once again use common sense and support Senator Jamie Eldridge’s legislation to implement a progressive, graduated income tax, an important first step in restoring fairness to our tax code and keeping Massachusetts a great place to live.
Excerpted from the Boston Globe; see original article for opposing viewpoint.
Fig. 1. Decline in Local Aid since 2001 (via MassBudget)
- State Taxes Have a Negligible Impact on Americans' Interstate Moves — Center on Budget and Policy Priorities - http://bit.ly/181qmJU
- Tax Flight Is a Myth — Center on Budget and Policy Priorities - http://bit.ly/1EZYvqx
FURTHER READING ON OUR BLOG:
- Can We Talk About Real Revenue Reform Now? - Progressive Massachusetts - http://bit.ly/1M3KmeW
- Reminder: We Haven't Been "Taxachusetts" for a Long Time - Progressive Massachusetts - http://bit.ly/1M3Ks6j
- All posts on our blog tagged "#InvestinMA"