The tax smorgasbord proposed by Gov. Deval Patrick this past week may be less than appetizing for half of the state's taxpayers, including some in the middle and upper-middle classes who will have to fork over more of their earnings as of next year if lawmakers approve the ambitious, complex plan.
But, with some important tweaks likely from legislators, the admirable goal of raising $1.9 billion to bring the state's roads, rails and bridges into the 21st century is worthy, especially if the bigger income-tax bite can be scaled down.
Patrick's plan is fair, overall, because most low- and middle-income residents would see either a small reduction or no change in their overall income and sales tax burden. The potential state income tax increase from 5.25 to 6.25 percent, along with a sales tax reduction from 6.25 percent to 4.5 percent, would be a wash for individuals with taxable income of $50,000 or less, or for families of four earning under $60,000, according to the Patrick administration.
At the higher end of the scale, a single taxpayer earning $120,000 would see a $485 increase; the married couple with two kids could pay $957 more on a $160,000 income.
The beauty of the plan, if any tax proposal can be so described, is that the cut in the sales tax would make it less regressive; the working poor and millionaires pay the same tax, an obvious greater burden on the service-sector worker than the bank or insurance executive.
The Patrick proposal also makes the state income tax more equitable, or progressive, even though everyone still pays the same percentage, by increasing the slice of your wages that are exempt -- someone making $25,000 a year would only pay state tax on $16,200 of income, instead of the current $20,600. A $50,000 a year earner would be taxed on $41,200 of income.
Households earning less than $37,523, to be precise, would see a $100 to $200 cut on their combined state income and sales taxes. Families of four bringing in above $102,866 face a considerably higher bill of $3,200 a year. In between, the increases would be modest, ranging from $100 to $400 a year.
The plan becomes more challenging to absorb when you factor in Patrick's idea of doing away with 45 personal tax deductions, including those for dependents under 12 and for college scholarships, as well as proposed increases in current turnpike tolls and a minuscule half-penny increase in the 21-cents per gallon tax at the fuel pump. Some corporate tax benefits also would be chopped.
Even though sales tax revenue would decline, all of it is destined for a kitty supporting public works programs to repair decrepit bridges and roads, build schools, and help fund potential rail service from Pittsfield to New York City, for example. The drowning-in-debt MBTA (Massachusetts Bay Transportation Authority) in Boston would be thrown a sturdy lifeline.
Patrick is aiming high to assure his legacy in his final two years but if he is to avoid overreaching and win approval from state lawmakers, two important changes are needed.
Tolls between exit 1 and 6 on the MassPike should be restored. As state Rep. Tricia Farley-Bouvier, D-Pittsfield, has pointed out, why should out-of-state drivers, who make up 80 percent of the traffic on the western end of the highway, get a free ride when all of us pay full freight to use the New York Thruway and other Northeast toll roads?
The gas tax should be raised by at least a few cents a gallon so the income tax increase can be cut back. The state's gas tax burden has been stable for 21 years, and now represents a much lower portion of the per-gallon cost than it did then. Motorists who drive in Connecticut and New York state see the difference, with prices there 20 to 30 cents a gallon higher than in the Bay State.
With these and other revisions, the Patrick plan stands a reasonable chance of approval. More important than his own legacy is the bequest residents would receive -- a safer, modernized road, rail and bridge system and education projects, such as a new high school for Pittsfield, that would help future generations thrive.
To contact Clarence Fanto, a regular Eagle contributor: firstname.lastname@example.org.