Massachusetts taxpayers received some good news Wednesday — the state is in great financial shape, triggering an automatic, though slight, reduction in the income tax rate.
That’s good, but we can think of something that would be much better — lowering the sales tax.
Taxpayers may recall that in the dire days of 2009, when the economy was in recession, the real estate boom had gone bust and thousands of people were laid off, the Legislature deemed fit to enact tax hikes to make up for lost revenue. Among them was a 25 percent increase in the sales tax, boosting it from 5 percent to 6.25 percent. There was some talk at the time that this was a temporary measure, but that was quickly dismissed as idle talk.
Today it’s a different world. The state is rolling in the dough. It’s collected $359 million more than it anticipated from July through November, and the trend just keeps surging upward. Indeed, November was the tax-fattest month of all, with collections exceeding expectations by 10.6 percent.
There’s so much money rolling in, the state is forced to automatically reduce the income tax from its current 5.25 percent rate, down to 5.2 percent. Happy days are here again.
But not so much if you are elderly and living on a tight budget, or if you are struggling on a low income. The sales tax remains at 6.25 percent, one of the higher rates in the nation (there are 12 states with rates higher than 6.25 percent).
It’s well known and well documented that the sales tax is one of the most regressive taxes imposed on people. It hits the poor and low-income workers the hardest. Most necessary commodities, with the exception of food and clothing, are subject to sales tax. It is an enormous and unfair burden on the poor and those struggling with low incomes. Republicans have tried, unsuccessfully, to pare back the rate. Where are our Democratic leaders, the ones who tell us that they’re for the working families?