Barely noticed in the state’s $34 billion spending plan is an item that should make us all sit up and pay attention — a $500 million tax increase that, among other targets, will hit every driver and computer data-based business in the state.
Add it up, and that’s a lot of people who will be getting a significant tax hike.
Much of the money is earmarked for infrastructure improvements to the state’s highway system, but there is an argument over whether it is enough. The governor asked for a far larger tax hike — $1.9 billion — but the Legislature balked, coming up with the $500 million package instead, and a showdown is expected on Friday. All of our local Democratic lawmakers voted to support the Legislature’s smaller, but still significant, tax hike, while the handful of Republicans left in the Statehouse voted against it.
Taxes in Massachusetts are already high, and the burden is about to get heavier. And while we agree that some new revenue will be needed, particularly in light of the MBTA’s financial difficulties, this tax package has some troubling elements.
The most odious of the proposed tax increases is a 3 cent per gallon hike in the gas tax — which doesn’t seem so bad until you consider the little proviso slipped into it. The tax hike is permanently linked to the rise in inflation, a practice that is rarely used in tax law. That means that in the future, lawmakers won’t have to vote to raise the gas tax — it will automatically increase, no fingerprints attached. That’s politically convenient for the Legislature, but irresponsible to taxpayers and cowardly as well. If lawmakers want to raise taxes, they need to make the case for it every time.
Lawmakers are also looking to gain about $160 million from a tax on certain computer services, billed by supporters as a “business to business tax” that will have no direct impact on consumers. Yet its full implications don’t seem to be widely understood.