A new paper on wealth inequality from economists Emmanuel Saez and Gabriel Zucman – who have written frequently on the subject – was released earlier this month. This paper is far better than previous attempts to measure...
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- Massachusetts Considering Income Tax Increase, New Transp...
Massachusetts Considering Income Tax Increase, New Transportation Revenue
Massachusetts Governor Deval Patrick (D) yesterday proposed the following package of tax changes:
- Broaden the income tax base, double the personal exemption, but raise the single-rate income tax from 5.25 percent to 6.25 percent. Overall, this would raise $2.8 billion in additional tax revenue.
- Reduce the state sales tax from 6.25 percent to 4.5 percent, reducing revenue by $1.1 billion.
- Business tax changes that would raise an additional $194 million.
If enacted, the income tax increase would push the state's rate past neighboring Rhode Island's top rate (5.99 percent), but still keep it below Connecticut's top rate (6.7 percent) and Vermont's top rate (8.95 percent). New Hampshire, of course, has no tax on wages, and has a 5 percent tax on dividend and interest income.
Earlier this week, the state Department of Transportation outlined a number of options (PDF) to boost spending for transportation by about $1 billion per year. These included:
- A new payroll tax of 0.16 percent for workers in the Boston area. While only Nevada has a statewide payroll tax (1.17 percent on wages over $62,500, minus health care deductions), but similar payroll taxes exist in Newark (NJ), New York City, and Portland (OR). Tax would raise $100 million per year.
- Raise the gas tax or index it to inflation.
- Increase the state sales tax from 6.25 percent to 7.75 percent.
- Increase the state income tax from 5.25 percent to 5.66 percent.
- Impose an additional vehicle registration tax based on carbon emissions (motorcycles and hybrids pay $15, hybrid SUVs and cars pay $30, SUVs pay $60, heavy trucks pay $85).
- A 2.4-cents-per-mile vehicle miles traveled tax (VMT), collected during the annual safety inspection.
- Routinely increase vehicle taxes and fees, tolls, and transit fares by 5 percent every other year.
- New tolls, which would require federal approval.
- Maintaining tolls on the Western Turnpike after the bonds are paid off in 2017.
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