By: Rep. Linda Dean Campbell – Oct. 2017
Brewing discussions here in Massachusetts about taxes prompted by ballot question initiatives provide us an opportunity to look at the big picture. This opportunity is now energized by recent tax changes proposed at the federal level. Let the games begin!
It is likely that Massachusetts will never shed the label it has carried for decades as having one of the highest taxation rates in the country.
The good news is that in recent years our State has actually been in the relative middle of the pact in terms of overall tax burden. One must look at the many ways we tax: state and local tax, property tax, income tax, sales tax. Our income tax rate is higher than most comparatively speaking, but our sales tax rate is actually comparatively lower than most others, even before factoring in the fact we do not tax food & clothing.
This puts us in about the middle of the country for taxes paid to state government and below the other New England States with the exception of New Hampshire.
Now comes the “but” ~ which is a significantly higher cost of living resulting from high energy costs; transportation costs; medical care; and especially the high cost of housing eat away at the bottom line and makes that “middle of the country” tax rate seem larger for the vast majority of our citizens.
So, if one is not fairly wealthy, the cost of living in Massachusetts is very high. A cost of living study several years ago found that Essex County was one of the most expensive places to live when considering average living expenses against average family income. It is exceptionally challenging for our young people starting out to find an affordable apartment, and, at the other end, our elderly often must sell their homes to downsize and have great difficulty finding an affordable, more supportive environment, in which to live.
Additionally, Massachusetts matched the national trend in growing income inequality almost exactly with the 1 percent of income earners grabbing 83 cents of every new dollar made from 2009-2013. This trend continues to strongly march forward into 2017. To be a top 1 percent earner in Massachusetts you need to make around $500,400.00 each year.
Top earners in Massachusetts make about 30 times more than the bottom 99 percent of us. This ratio is higher than it is within 44 other states.
We all need to look at this big picture as we analyze and evaluate any new tax plans coming out of Washington or the State House. One can argue that all taxation plans need to be judged on how they address an ever growing income inequality. This trend is unprecedented in this country and likely is a threat to both our democracy and the general welfare of our people.
Government played a most constructive role in the middle of the Twentieth Century in creating a large and economically secure middle class, a class that both made and bought our manufactured goods; paid our taxes; fought our wars; and created stable and safe neighborhoods in which to live.
This success can be replicated with new policies that address the challenges of our own times. Let the debates begin. I very much look forward to your thoughts and opinions on this important topic.
State Representative Linda Dean Campbell represents Methuen and Haverhill in the Legislature and is currently serving as the Vice Chair of The Committee on Revenue. She can be reached at 617.722.2380 Linda.Campbell@mahouse.gov