Cutting the Massachusetts Sales Tax Will Limit Government Waste and Create Jobs
Some political analysts are billing the November 2nd elections as the midterm that will define a generation. In many ways, they are right. This November, Americans must choose to either move toward a more efficient, fiscally responsible government or to maintain the same wasteful, bureaucratic nightmare that has left us with high deficits and even higher unemployment. The choice between leaner government and bigger government must be considered at every level of the political sphere. Fortunately for Massachusetts residents, we have the opportunity enact such change by voting for a ballot question that will help to limit government waste and add jobs by boosting the state economy. A YES vote on Ballot Question 3 will reduce the sales and use tax rate from 6.25 percent to 3 percent. It will also return economic sanity and job creation to the Commonwealth.
It will do so, in part, by reducing government waste—a huge problem in Massachusetts. Contrary to what the opponents of Question 3 would have us believe, the passage of the initiative will not force the state to cut local aid to cities and towns. There will be no need to cut funding for schools, law enforcement or emergency services. That is because it only reduces the state’s spending by 4.7 percent, leaving local spending and essential services untouched. Only 30 percent of the state’s spending is given as aid to Massachusetts communities. 70 percent is left to be spent on the state level. Within that 70 percent, there is room to cut reckless spending, no show jobs and fraud within various social programs. The elimination of such wasteful expenditures will leave taxpayers with more money to invest and spend in the economy. And, as investment and spending increases, businesses will begin to hire new workers to provide for the heightened demand.
There are currently 300,000 unemployed Massachusetts residents. Another 300,000 are underemployed. Before Governor Patrick and his friends on Beacon Hill raised the sales tax from 5 percent to 6.25 percent, the unemployment rate was 8.7 percent. In the 14 months since then, unemployment has only dipped below 9 percent three times. It climbed as high as 9.5 percent in January and February of this year and that figure does not include workers who are underemployed or have stopped looking for work. A Beacon Hill Institute study preformed before the tax increase went into effect showed that the hike would cause the loss of almost 10,000 private sector jobs. Using the same formula in reverse, the Alliance to Roll Back Taxes estimates that after the sales tax decrease goes into effect, it will create 32,929 new and sustainable jobs.
It will do so in a few ways. First, it will leave more money in the consumer’s wallet. It is estimated that each of the 3,400,000 taxpayers and workers in Massachusetts will save an average of $688 per year under the new law. That is an extra $688 that each person can enter directly into the economy, creating revenue and jobs. Second, it will help retailers near the New Hampshire border that are harmed by the current tax rate. The “Live Free or Die” state has a 0 percent sales tax on its goods. With such a jobs-friendly environment so close, it is easy to see why it is so hard for Massachusetts stores charging a 6.25 percent tax to stay open. A lower tax rate will encourage consumers to stay in state, helping to save Massachusetts businesses and the jobs that they create. Finally, it will make Massachusetts more attractive to consumers from Rhode Island, Connecticut and New York who face higher sales taxes in their own states. The added revenues from such shoppers will provide a major boost for the economy as well as spur on job creation.
This November, we have a choice to make. When we go to the ballot box, we can either vote for jobs and the economy or for more waste, fraud and abuse on Beacon Hill. There is no doubt that this election cycle will be historic. But it will only be historic for the right reasons if we choose the candidates and the policies that lead us to future prosperity. When considering Ballot Question 3, the choice is clear. For too long, the politicians working in Boston have squandered the money that we earned. It is time to eliminate that waste and give taxpayers more control over their income. It is time to reduce the sales tax and invest in our future.
