The current recession has caused massive job losses, reduced private spending and investment, and reliance on government for support. The government has faced a reduced stream of revenue to fund services and employees.
With a lesser amount of money being paid and spent, government loses its major source of funding: taxes, specifically sales and income. Massachusetts is running out of options to balance of the budget, which was projected to be roughly $2.4 billion. Governor Patrick has twice announced budget cuts that affect a variety of services, including education. Along with budget cuts and tapping into the rainy-day fund, hiring freezes and layoffs have been implemented as well.
In terms of increasing revenue, ideas have been floated to apply the sales tax on items that are not currently affected by it. All clothing that is purchased, sugary foods and soda, hotel stays, meals, and of course the gas tax.
With people losing their jobs, the state is losing funding through income taxes. I’d bet almost all of these people filed for unemployment benefits, which means the state is bleeding money through not receiving and paying funds. Along with job loss, the market losses have hurt the older citizens that relied on their funds for health care and general living. Now those citizens must rely more on Medicaid and elderly state programs. It doesn’t help either that Patrick has a very ambitious agenda for government expansion that will need more of our money to fund it.
Where is the money to come from? From “the rich,” of course! It’s been far too long that the rich has lived high off the hog without paying their fair share to society. Who are they to not feel the struggle us poorer folks are facing? Especially since Bush the Younger decreased their marginal tax rates and the state only has a flat rate of 5.3%. What the state needs to do is soak them, maybe raise the income tax rate to 12% to incomes above $150,000, because Obama is going after them too, so instead of there being winners and losers, we can all live in misery together!
The funding really does need to come from somewhere and an increased sales tax may not do it. Why not take a little more from those who can afford it? Most rich people in Massachusetts are liberals anyway, so I’m sure they wouldn’t mind giving up the extra mocha latte per week if it was going to help a single mother with five kids and another one on the way attain public housing.
As a fellow student of mine stated; “Common sense should dictate that raising taxes during this time would be a bad idea.” She’s right; why raise taxes when times are tough? It was tried by Hoover during the ’30s, and look what that turned into. People are already worried with employment and the volatile pricing of energy, food, and stocks. The last thing we need is an additional expense on the workers who are helping to keep the state economy afloat. Recessions aren’t ended by the government “spreading the wealth,” they are ended by citizens keeping and handling more of their money while the government lives within its means.