Happy Groundhog Tax Day!

The Massachusetts legislature has not met in full formal session in over three weeks.  That’s good news, because our wallets are not under attack.  But, that doesn’t mean tax hikes are not on the way, because they will be.

Governor Charlie Parker recently filed the FY 21-22 budget which relies heavily on rainy day funds not tax increases.  Unfortunately, it won’t stop Bacon Hill now that it’s their turn to draft the budget.  They are addicts and they cannot help themselves.  

So, how will they abuse us poor taxpayers this time?

Last week the only thing happening on the Hill was a Tax Expenditure Committee hearing.  Now you probably think a ‘tax expenditure’ is money being spent on actual things like paving or plowing the roads or hacks.  It’s not!  Only in Taxachusetts is a ‘tax expenditure’ an item the state doesn’t tax.  That’s right; Bacon Hill believes it is an expenditure on their behalf for not taxing food and clothing.  I know that this sounds crazy, but this is for real.  Keeping your money is costing Bacon Hill and they don’t like it.

The hearing mainly focused on business tax credits for creating jobs.  There were no really frightening recommendations from that portion of the meeting.  

Just when it seemed like we might be safe, they went to a discussion regarding gasoline and alcohol.  Are they now both sin taxes?  I thought it was an odd pairing considering we do pay taxes on both until they got to the heart of the matter.  Yikes!  The state doesn’t collect sales taxes on gas or alcohol.  Oh no!

Gas is taxed per gallon and alcohol has a tax incorporated into the price.  So these taxaholics did a review to see if they can get more money by putting a direct sales tax on gas and alcohol instead of the current tax structure.  It turns out a direct sales tax on gas would generate less revenue for the state, but not in the case of alcohol.  Therefore, they are recommending that the legislature look at a possible sales tax on your booze.  I guess they will call it an alcohol tax adjustment.  

A couple of members did confess on the public call that they stocked up on alcohol the last time before they increased the booze tax.  After that revelation, I just had to look up the membership of this committee.  Guess what was missing?  Of course, no ordinary taxpayer made the cut.  The committee is comprised of legislative leaders and Parker appointments who are required to have tax expertise.  How about someone who is not connected and has to pay these taxes?

If I was able to unmute myself on the call, I would have reminded them that the last time the legislature raised taxes on gas and alcohol, they were both defeated by a ballot question.  Happy Groundhog Day!

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