SalemNews.com, Salem, MA

March 8, 2014

Letter: Graduated tax can be effective


The Salem News

---- — To the editor:

After reading the first three paragraphs of the editorial condemning the mere mention of a progressive, graduated income tax in the commonwealth (“Hideous ‘grad tax’ buzz in heard again in the land,” March 4), I was certain that I was not about to read a balanced discussion of the issue. What I read was a litany of tax complaints and the various dates throughout history where the graduated tax was defeated electorally. The last one being 20 years ago. In those last 20 years, we have seen federal support for the states shrink under the banner of austerity, or whatever name its being called today. We have seen the cumulative impact of the cities and towns struggling to finance themselves after having their income source ripped away from them by Prop 21/2.

The effects of cutting income sources essentially neutral for the state and its communities is in our headlines every day. For example the underfunding of the DCF is mentioned only as an afterthought after the press tears those DCF workers to shreds. They are overbooked and undertrained. Why? Do you really think Deval Patrick or even Mitt Romney wanted to decimate those departments? A little bit of money only buys a little. How about the lack of oversight at the crime lab or the compounding pharmacies? The statement that the commonwealth has a spending problem rings false, especially when you look at the spiraling problems the state has and the link between those problems as they increase and the resources available decrease.

In fact, the editorial makes the spending problem into a statement of fact, which is unjustified as the implication that all taxes are an unjust incursion into our personal wealth. As if being a liberal makes one want to pay more taxes, as if the state would be conducting some sort of left-wing experiment by going to a tax method used by nearly 80 percent of the states that have an income tax.

The real question that is being ignored at the altar of “Taxes bad, Liberals badder” is the question of what do we as a state want to purchase with our tax dollars. That question must be answered first. Second, in what manner do we collect those taxes. Right now we use a wide variety of taxes, sales tax, income tax, user fees, real estate taxes, luxury taxes, sin taxes, estate taxes and of course the ever-popular gambling.

Fairness is not a requirement in determining a rate of taxation. The reason is very simple, fairness is a subjective term and taxes, if anything are objective. So, the overall method(s) of taxation can be looked at this way. How does the state collect sufficient taxes to cover all the items we want the state to purchase? Last, but very, very critical is the additional rubric that is often used instead of, or mistaken for, fairness. That rubric is that any tax should have the least impact possible on first the economic welfare of taxed individual and that impact should positively impact the economic health of the state.

Historic and economic analysis has shown that a graduated income tax does meet those goals. One critical potential outcome of a graduated income tax is that if it is aggressive enough, it can create pressure on the salary structure to reduce income inequality. Which is an indicator of economic stagnation.

Ask some teachers, ask a cop or a firefighter they will all tell you the state and its communities are not providing them with the resources in money and equipment they need to do their job. Ride the roads, ride the T or a bike; our infrastructure is disintegrating. Obviously, the current taxation system is not up to the task. Just because the voters rejected a change 20 years ago is not a good reason to not re-examine the issue. In fact, instead of just reviewing income taxes, we should also periodically examine our tax methods. Perhaps it is time to retire the sales tax?

Brad Sandler

Salem