The Return of Taxachusetts

They’re back…..higher taxes are returning to Massachusetts and average folks are beginning to feel the effects.   A close friend of mine called me up late one night to do some complaining about her financial situation.  My friend is a lawyer working at a very good firm and she and her husband have recently purchased their first home. I was the recipient of this late night venting because I am known among my circle of friends as the political guy who knows all about politics and how government works, and the subject of her rage that night had to do with her property taxes.  She had just found out that the city of Boston was changing the way it does its property assessments and that change will end up costing her and her family more money.  She then began to reveal how frustrated she felt in her efforts to get ahead in life financially and how the cost of living was having a negative impact.  Unfortunately it was up to me to break the news to her about the Governor’s budget and tax plans.

This month Deval Patrick, in his second term, has done what he DSC_0107.JPGprobably wanted to do in his first term: propose a huge new tax increase.  The Governor is proposing that the state’s single rate income tax go up from 5.25% to 6.25%.  The Governor’s new tax plan also calls for the elimination of 45 income-tax deductions.  Mr. Patrick seeks to eliminate such dedications for any profit people would receive for selling their homes, on adoption fees, college scholarships, T passes, and children under 12.  Massachusetts under this plan will also see a raise in business taxes, and residents will have to pay higher gas taxes, turnpike tolls, and excise taxes for our vehicles.  It all equals about 1.9 billion a year tax increasein net tax hikes.  All of this comes on the heels of Federal tax increases and Congress allowing the payroll tax reductions to expire during the fiscal cliff deal.  That payroll tax was allowing families making between $50,000 to $75,000 to save about $822 a year.  A lot of the Governor’s plan has to do with the ever-increasing cost of our state’s health care program (see the Wall Street Journal’s review & outlook article:  “The RomneyCare Bill Comes Due,”Jan. 23rd 2013).  Seeing how ObamaCare is modeled after RomneyCare one can only wonder when the Bill on the federal level comes due, how much higher will our taxes go up?

Which brings me back to my friend, whose family is the classic example of that middle class family politicians from both parties say they are fighting for.  She and her husband supported both Governor Patrick and President Obama in all of their elections.  They took great pride in watching both men on TV and cheered their speeches.  Whenever I would push her in asking just what policies of the Governor and the President she supported I would just get platitudes and general statements about them standing up for people and bringing the type of change we can all believe in…whatever that means.  My friend was also very quick to dismiss any conservative counter-opinions to the President and Democrats in general and she believed the tea party Tea Party to be just a bunch of crazy racists.  As my friend and I talked that night and she began to see how the policies of people she supported electorally were starting to affect her own personal economy, financial goals, and dreams, she began to question some previously-held conceptions.  When we ended our conversation, she began doing to some research of her own, including looking at some of the things folks from the tea party were saying about our government.  Although I am highly confident my friend will never be a tea partier, she no longer believes they are just crazy racists and that maybe, just maybe, there are people out there whose opinions may differ from ours but it may be worth actually listening to what they have to say before we make up our minds. After all, details matter even for altruistic ideas and great speeches.



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