Tax time?

New taxes may be needed. Plus, why Massachusetts can take pride in the Serve America Act.
By EDITORIAL  |  April 22, 2009

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State House of Representatives leaders have served the Commonwealth well with their austere new budget: they have shown us the tremendous sacrifices we will need to make, and the drastic cuts that will be put into effect, if we don't raise new revenues. Now, it is up to the public and our political leaders to make tough decisions based on that reality and levy certain taxes.

According to an analysis from the Massachusetts Budget and Policy Center, the House budget would dramatically cut funding for, among other items, local aid, public colleges, child-care services, substance-abuse services, elder services, public transportation, workforce training, and summer jobs for at-risk youth if no new taxes are implemented to put more money into play.

These are dire cuts, particularly during an economic downturn, when government spending can help spur recovery.

As a result, talks of boosting revenues have been re-ignited. Patrick wants to sharply increase the gas tax and extend the five-percent sales tax to include candy, alcohol, and soda. State Senate President Therese Murray has proposed increasing the state income tax, and some legislators want to bump the existing sales tax up to six percent.

Tax increases are usually a poor fix during a recession. But the spending cuts may do even more harm.

Additional layoffs and delayed investments caused by certain budget reductions, for instance, would forestall economic recovery and even complicate budget woes, since the state is required to pay unemployment benefits. Other cuts that make it harder for people to pay for college, get child care, or find training will leave too many Bay Staters sidelined as the economy turns around.

That leads us to reluctantly consider ways to increase revenues.

The Phoenix believes that a gas-tax increase makes the most sense. Increasing the income tax is the worst option. It is too broad-based, taking money from people who need every penny.

A sales-tax increase is better; it leaves unaffected the items, such as medicine, clothing, and food, that families need most. If it can be even more targeted, like Patrick's "sweets" tax, that's even better — although the sweets tax, which would raise just $43.5 million a year, is not in itself a complete solution.

Some combination of a gas-tax and a targeted sales-tax levy could potentially restore funding to certain programs — enough, perhaps, to save important line items.

Selecting those items, however, will require real leadership and discipline from Beacon Hill. Every interest group, from city mayors to advocates for the homeless, is legitimately bombarding legislators with pleas.

The job on Beacon Hill is to make sure those sacrifices are truly shared, and not dumped on those who have the least pull in the corridors of power.

Faithfully served
People often claim Massachusetts is out of step with American values. Assuming one of those values is serving our communities, we are actually ahead of the curve.

Earlier this week, President Barack Obama signed into law the Edward M. Kennedy Serve America Act, which will increase the government's investment in public service. It will triple the number of people participating in AmeriCorps, to 250,000. It is just one piece of a smart, forward-looking plan to encourage, prepare, and reward Americans for doing their part for their communities.

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