Wednesday, March 11, 2009

The irrepressible urge to raise the state sales tax

Talk is resurfacing about boosting the sales tax by 20 percent. The bad penny of tax policy; it won't go away.
Top state lawmakers are seriously considering a controversial and politically risky plan to boost the sales tax by one penny to 6 percent, socking it to Bay State residents already facing possible gas and booze hikes.

Both House Speaker Robert DeLeo (D-Winthrop) and Senate Ways and Means chairman Steve Panagiotakos (D-Lowell) are eying a sales tax of 6 cents on the dollar that they say would bring an additional $750 million a year into state coffers.

“I don’t think anything can be considered as off the table,” DeLeo said yesterday, later adding he plans to pass reforms before any additional taxes are considered.

A conservative think tank blasted any talk of a sales tax hike in a tough economy, saying that even a one penny increase could mean a loss of 10,000 private sector jobs along with a $40 million drop in investment revenue.

“Any tax increase the state undertakes right now will have a negative effect on the economy because it will drive business to other states,” said Beacon Hill Institute Executive Director David Tuerck, who urged lawmakers to focus on cuts instead.

Tax hikes can be hazardous to a political figure’s health - especially during a recession - as evidenced by a recent dip in Gov. Deval Patrick’s job approval ratings. Many speculated Patrick’s plans to boost taxes on gas, booze and candy were partially to blame.

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