I haven’t always agreed with Massachusetts Gov. Deval Patrick on economic issues. That said, his proposal to raise $1.9 billion for education, childhood development, and transportation–all things we desperately need–is very good (you can get details here and here). For once, it’s good to see a politician somewhere enacting policies that don’t come down on the middle-class and impoverished workers like a ton of bricks–it’s a very progressive tax hike.
Here’s a summary of what it would involve on the tax side:
•The income tax rate would increase from 5.25% to 6.25%. Of course, it’s worth noting that we’re talking about a 6.25% rate–if you lose a $1,000 tax deduction, it costs you $62.50.
•The sales tax is lowered from 6.25% to 4.5%, and is expanded to cover candy and soda.
•The personal exemption would be doubled (i.e., the amount of income automatically exempted from taxation doubles, preferentially helping lower income households)
•It would end many deductions (pdf). Some of these are good, such as certain capital gains tax deductions, while others I’m not too keen on, such as the deduction for transit employer subsidies (we should be encouraging people to use mass transit). Overall, these deductions seem to target upper-middle class households.
•There would be slight gas tax increases starting in 2015 (these should be higher and sooner).
•Starting in 2015, mass transit fares and tolls would increase five percent every two years. The mass transit increase is foolish.
On the spending side, here’s what it does:
•It increases Income Eligible Child Care. The Income Eligible line item provides care for children of low-income parents who are working, disabled or in an education or job training program. It also creates a preschool initiative, and provides additional resources for early childhood reading.
•It increases funding for state colleges and universities.
•It doubles the state scholarship fund.
•It restores some state parks funding.
•It dramatically increases the supervision of pharmacies and drug compounders.
•It increases the Safe and Successful Youth Initiative, a youth violence grant program.
•It partially restores public health cuts.
•It allots $1.13 billion for the Massachusetts Bay Transportation Authority (MBTA), an increase of $178.8 million over FY 2013.
•It allots $239.7 million for the Massachusetts Transportation Trust Fund (MTTF), an increase of $78.0 million over FY 2013.
Overall, I like it, though the mass transit increases starting in 2015 are very short-sighted. We need to fix stuff, lots of stuff, and this is a good start.