MA Flat Tax/Hike (sales, credit, income)

[sponger42]

I find it rather hard to believe that the only plans in the legislature BOTH call for a hike of the MA flat tax by an entire 1%! The only difference in the supposedly "more conservative" tax plan is to lower the sales tax by a % or so. This seems an excellent way to punish frugal lower wage workers and reward wealthy spendthrifts.

The proposals will increase the tax burden on everyone by about 18%.

Since we are soon moving to CA, we'll thankfully dodge this increase, but that state's progressive income tax provides a good comparison:

-Currently, a slightly upper-middle dual-income couple would pay 2% more income tax in CA than MA.
-With the new taxes, that same couple will pay 15% less income tax in CA than in MA.

Bump that same couple's income down a bit:
-Currently a slightly lower-middle dual-income couple would pay 53% less income tax in CA than MA.
-With the new taxes, that same couple will pay 81% less income tax in CA than MA!

Considering what a liberal hotbed MA is purported to be, can someone explain to me why the state tax code so heavily favors the rich, that a middle class family will soon pay nearly double the state taxes they would in CA?

[Brave Stranger]

Originally Posted by sponger42

I find it rather hard to believe that the only plans in the legislature BOTH call for a hike of the MA flat tax by an entire 1%! The only difference in the supposedly "more conservative" tax plan is to lower the sales tax by a % or so. This seems an excellent way to punish frugal lower wage workers and reward wealthy spendthrifts.

The proposals will increase the tax burden on everyone by about 18%.

Since we are soon moving to CA, we'll thankfully dodge this increase, but that state's progressive income tax provides a good comparison:

-Currently, a slightly upper-middle dual-income couple would pay 2% more income tax in CA than MA.
-With the new taxes, that same couple will pay 15% less income tax in CA than in MA.

Bump that same couple's income down a bit:
-Currently a slightly lower-middle dual-income couple would pay 53% less income tax in CA than MA.
-With the new taxes, that same couple will pay 81% less income tax in CA than MA!

Considering what a liberal hotbed MA is purported to be, can someone explain to me why the state tax code so heavily favors the rich, that a middle class family will soon pay nearly double the state taxes they would in CA?

It's simple to explain: The Massachusetts constitution does not allow for a progressive income tax. Only one income tax rate is allowed. There have been votes to change the constitution, but the public has ALWAYS voted them down. I suspect MA citizens don't want to see a tax rate of 13.3% like CA has for its highest earners.

[sponger42]

Originally Posted by Brave Stranger

It's simple to explain: The Massachusetts constitution does not allow for a progressive income tax. Only one income tax rate is allowed. There have been votes to change the constitution, but the public has ALWAYS voted them down. I suspect MA citizens don't want to see a tax rate of 13.3% like CA has for its highest earners.

Thanks for the answer. That does explain it. Things sure don't change here, so I expect MA will always have a flat tax. Oh well, that's what makes it a good place to be a 1%er.

Given how everybody talks, and earning a pretty good wage, I never thought moving to California would lower our tax burden, but it does, dramatically. Bonus!

[Brave Stranger]

I can't speak for all Massachusetts voters, but I would venture to guess that they are concerned about giving the state government the power of a progressive income tax. It may start out only targeting the top earners, but over time those tax brackets tend to creep down into the middle class. Massachusetts has a long history of such behavior.

[sponger42]

It may start out only targeting the top earners, but over time those tax brackets tend to creep down into the middle class.

This doesn't really make sense. The flatter the tax, the more inequitable the wealth distribution will become, and the less revenue the state will take in. Unless you've got a "regressive" tax structure (which makes no sense, as the bottom 80% of Americans make so little that raising taxes on them generates very little revenue.) the "middle class" will always benefit from a non-flat tax structure.

Of course, a progressive tax isn't fair to the top wage earners. After all, they certainly work 380 X harder than the middle class, and deserve to keep their compensation. A capitalist society is not in the business of legislating social justice by some arbitrary relative number.

A progressive tax only makes sense for those with socialist leanings who want a large, robust middle and upper-middle class. People who endorse videos like this one:

Wealth Inequality in America - YouTube

[Cape Cod Todd]

The way I see it is the working middle class will have more taxes taken out of their paychecks while the slackers will pay less in taxes when they go to use their EBT cards. After hearing about the runaway fraud fraut aide programs in this state this past week it is pretty sad they can't track down the people that are abusing it. It almost seems like they don't want to and instead will call on the working people to take up the slack.
Why do they have all these weird percentages? Why not have the sales tax back at 5% and leave it there then increase the income tax just a smidge if they really need to.
I would much rather see the state reel in the excessive and wasteful spending that is everywhere.

[Brave Stranger]

Originally Posted by sponger42

This doesn't really make sense. The flatter the tax, the more inequitable the wealth distribution will become, and the less revenue the state will take in. Unless you've got a "regressive" tax structure (which makes no sense, as the bottom 80% of Americans make so little that raising taxes on them generates very little revenue.) the "middle class" will always benefit from a non-flat tax structure.

Of course, a progressive tax isn't fair to the top wage earners. After all, they certainly work 380 X harder than the middle class, and deserve to keep their compensation. A capitalist society is not in the business of legislating social justice by some arbitrary relative number.

A progressive tax only makes sense for those with socialist leanings who want a large, robust middle and upper-middle class. People who endorse videos like this one:

Wealth Inequality in America - YouTube

My point about progressive taxation in the context of the past history of Massahusetts is that over time the state would expand income tax rates on middle class earners & not just keep the higher rates confined to the highest earners in MA. It's called "bracket creep" the Carter years were famous for this.

[sponger42]

Originally Posted by Brave Stranger

My point about progressive taxation in the context of the past history of Massahusetts is that over time the state would expand income tax rates on middle class earners & not just keep the higher rates confined to the highest earners in MA. It's called "bracket creep" the Carter years were famous for this.

So better to preemptively ensure that the tax rates hit the middle and lower income people immediately, rather than risk them eventually creeping downwards into the middle class?

[Brave Stranger]

Originally Posted by sponger42

So better to preemptively ensure that the tax rates hit the middle and lower income people immediately, rather than risk them eventually creeping downwards into the middle class?

I'm not stating my philosophical position on tax policy in this thread..... I'm just explaining that progressive taxes are not allowed under the Massachusetts constitution & then guessing from my experience of living in this area all my life on why the citizens of Massachusetts might not trust their government on the tax issue.

[wxjay]

Originally Posted by sponger42

This doesn't really make sense. The flatter the tax, the more inequitable the wealth distribution will become, and the less revenue the state will take in. Unless you've got a "regressive" tax structure (which makes no sense, as the bottom 80% of Americans make so little that raising taxes on them generates very little revenue.) the "middle class" will always benefit from a non-flat tax structure.

That's only true if tax deductions, tax loopholes, and tax credits are unequally applied (which oftentimes they are). If one had a true flat tax system on income earned, the wealthy would be paying much, much more than the lower income earners.