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Tuesday, June 30, 2009

More Tax Hikes in Massachusetts

Lawmakers in Massachusetts have been working quite hard in recent years to make it increasing inhospitable to live, work, invest, and build and run a business in the state.

Most glaring in recent years was the massive and misguided government intrusion into health care. (See, for example, a recent SBE Council analysis.)

But there was more last week. With the new state budget year starting this Wednesday (July 1), Governor Deval Patrick (D) declared on Friday that he would sign a massive tax increase.

The tax hikes include – as reported by the June 27 Boston Globe – an increase in the state’s sales tax from 5% to 6.25%. The state’s meals tax will rise by the same amount, with localities empowered to jack up the rate further to 7%. Local governments also will be allowed to increase the hotel tax by 2 percentage points. And there will be higher levies on satellite television, and on alcohol sold at retail stores.

Patrick actually said: “I will approve the new revenues we need to bring our budget into balance, offset the need for even more difficult cuts, and expand opportunity in the Commonwealth?”

Excuse me? Was that “expand opportunity in the Commonwealth”?

True opportunity, however, springs from private-sector entrepreneurship, investment and job creation. Those critical endeavors certainly are not helped by these tax increases. Instead, opportunity is dampened due to higher tax costs for consumers and businesses.

Bad news from government just keeps coming in Massachusetts.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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