Creating fair, competitive tax system will provide revenues necessary to improve Commonwealth’s economic future
BOSTON – Wednesday, January 16, 2013 – Tonight in his State of the Commonwealth Address at the Massachusetts State House, Governor Deval Patrick will propose to invest in opportunity and growth by building a 21st-Century education and transportation network for this generation and the ones that follow.
“There is no good time to raise taxes. I know how tough the times have been on the people and families of the Commonwealth. And though the worst of the Recession is over, many, many families still face tough decisions and have deep anxiety about the future. I would not ask if I did not believe in my heart that investing meaningfully today in education and transportation will significantly improve our economic tomorrows,” the Governor plans to say.
To support almost $2 billion in meaningful investments that will strengthen the state’s economic future, the Governor will call for the creation of a more fair and comprehensive tax system that lowers the sales tax to 4.5% and raises the income tax to 6.25%.
“There is no good time to raise taxes. I know how tough times have been on the people and families of the Commonwealth,” Governor Patrick plans to say. “I would not ask if I did not believe in my heart that investing meaningfully today in education and transportation will significantly improve our economic future. But because we all have a stake in that future, we should all contribute to paying for it.”
The Governor will say that any new revenue must meet the following principles: comprehensive, fair, dedicated and competitive.
In his budget, the Governor will seek to cut the sales tax from 6.25% to 4.5% and dedicate all the proceeds to a public works fund that will support the transportation plan laid out on Monday, as well as the school building fund and other public infrastructure. The sales tax proceeds will be off limits for any other purpose.
To fund the education initiatives outlined yesterday, the Governor will propose a 1 percentage point increase in the income tax to 6.25%. To make that increase fair to all according to their ability to pay, the Governor will double the personal exemptions.
To make that increase fair to all according to their ability to pay, the Governor will propose that we double the personal exemptions for every taxpayer and eliminate a number of itemized deductions. Making those changes gives us a tax code that is simpler and fairer.
The changes to state sales, income and business taxes will be comparable to and competitive with our neighboring states and those with which we compete.
The Governor plans to tell the Legislature: “That is what I propose. There will be debate. I encourage it. Every one of us here has to think twice before asking people who already feel strapped to contribute a little more. But this time, instead of sinking into the same old slogans, let’s have a serious, fact-based debate. The people we work for want the schools I have described; they want the rail and road services we have laid out; and above all they want the opportunity and growth these investments will bring. We on their behalf have choices to make. I choose growth.”