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New England News
Thu January 17, 2013
Gov.Patrick Proposes Large Tax Increase
Massachusetts Governor Deval Patrick, beginning his final two years in office, is proposing an ambitious restructuring of the state’s tax system. The governor outlined the proposal in his annual State of the Commonwealth Address last night.
Governor Deval Patrick announced a bold plan that would raise an additional $1.9 billion dollars in taxes annually.
The governor said his proposed state budget that will be released next week will propose an increase in the income tax rate from the current 5.25 percent to 6.25 percent. He’ll propose a cut in the state sales tax from the current rate of 6.25 percent to 4.5 percent. All the sales tax money would go to a public works fund. The additional income tax revenue would fund education initiatives.
By putting more emphasis on the income tax and less on the sales tax, Patrick’s plan would shift more of the tax burden on to higher income earners. According to figures supplied by the administration, the average tax burden for the lowest income brackets would decrease by $200. It would increase by more than $3,000 for the top income brackets. The plan proposes a doubling of the personal exemptions for all taxpayers, eliminating some itemized deductions and an increase in the corporate income tax.
Patrick said he wants to build a 21st Century transportation network. In his address he highlighted proposals from a transportation plan that was released earlier in the week. It includes commuter rail between Springfield and Boston, and the reopening of the Housatonic line between Pittsfield and New York.
His education initiatives include expanding universal preschool where nearly 30,000 children are on a waiting list.
Toward the end of his 24 minute speech, which was interrupted only a hand full of times by polite applause, Patrick acknowledged he has an eye on his legacy.
State Representative Stephen Kulik of Worthington, who is vice chairman of the Ways and Means Committee said the proposal will be carefully studied and evaluated for the next several months.
Kulik said the spending proposals in transportation and education are certainly worthwhile, but needed to be weighed against how such a sizable tax hike would impact the still sluggish economic recovery.
New England News