Metro: Pennywise, Pound Foolish

6/10/09
by Mark Puleo

Penny wise and pound foolish, my grandfather liked to say. It’s an appropriate aphorism for Beacon Hill these days. With revenue cascading downward, lawmakers are poised to eliminate two Suffolk County holidays – Evacuation Day and Bunker Hill Day – as a way to reduce costs in the recession.

It’s not inherently a bad idea, since by some estimates the two paid holidays cost taxpayers about $5 million. But by obsessing over Suffolk County feast days, our solons are shirking their true fiscal responsibilities, which are measured in pounds, not pennies.

Gone is a serious discussion of tax equity and fairness. Earlier in the spring, gas taxes and toll increases were all the rage; more recently, it was the sales tax. Thankfully, Gov. Patrick said he would veto any budget that increased it, as previous House and Senate budget versions upped it to 6.25 percent.

Portrayed as a progressive revenue-enhancer, the sales tax is definitely one of the most regressive taxes around. It hits the underprivileged especially hard, as most flat taxes do. Ever wonder why we exempt food and non-luxurious clothing from this tax? It’s otherwise inescapable.

But there’s one tax that almost no one dares mention: the personal income tax. A mere one percent increase would raise over $2 billion dollars. Plus, it’s the fairest of all taxes: Unlike a gas tax or a toll increase, it’s paid the most broadly; and in a progressively-tiered system, those who make more, pay more. Currently, our state constitution requires a flat income tax. If amended to resemble the federal government and 37 other states, our tax burden would shift to the most affluent.

As you can imagine, legislators aren’t rushing to file any bills. While state senators Sonia Chang-Diaz and Jamie Eldridge courageously advanced the idea last month, it went nowhere. Most Democrats remember 1990 – the last time the income tax was raised, also in the midst of a recession. Political analysts blamed the tax increases for electoral losses, but ethical clouds swirled over Democrats that year, too.

Last week, former House Speaker Sal DiMasi got indicted on corruption charges, dooming any chance of a serious tax discussion. Sadly, this year is shaping up to be like 1990, except without the fiscal responsibility and bold leadership that actually closed the budget deficit. No wonder they’re focusing on Bunker Hill Day.

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