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Massachusetts Ballot to Include Sales Tax Cut Proposal

1 min readBy: Joseph Bishop-Henchman

The Boston Herald reports that a referendum to reduce the state sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. in Massachusetts will appear on the November 2 ballot.

If passed by the voters, the state sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. would drop from 6.25% to 3%, starting January 1, 2011. The current 6.25% puts Massachusetts as the 30th highest state-local sales tax rate in the country; at 3%, they would be 46th highest.

From the Herald:

Carla Howell, the chief supporter of the ballot question, said the state would be able to cut that much while not affecting spending by city and town governments.

Critics, including all four candidates for governor, say there’s no way the state could absorb the loss in revenue without deep cuts, including reducing local aid to cities and towns.

More on Massachusetts here.