Saturday, July 19, 2008

An Open Letter To The Voters of Massachusetts

Dear Fellow Residents,

Repealing the income tax in Massachusetts isn't a bad idea, it's an atrocious one that would usher in a debacle the likes of which the state has never experienced. Pardon my apocalyptic tone, but there can be no hyperbole when one considers the level of decimation to public services that would ensue if the income tax is repealed. And the widespread loss of public services is just one in a whole range of deeply unpleasant effects that would occur as a result of such a repeal. Why should this be so?

Massachusetts is already facing the prospect of severe budget shortfalls that will challenge its ability to meet its core obligations. Should the repeal of the income tax pass, the state will fall so far behind in its ability to raise revenue that government will have no choice but to massively cut services, even basic services. Concomitantly, unemployment will increase as state employees are fired en masse. And in order to try and compensate for the loss of income tax revenue, the government will resort to the following desperate measures, massive increases in real estate taxes, sales taxes, and corporate taxes. They will have no choice. Get your mind around a state full of renters and what that will mean, because no one will want to buy residential property. Equally, prepare yourselves for the sickening sucking sound of businesses deserting our inhospitable shores for more tax friendly ones.

Last but not least, Massachusetts as a viable financial entity will likely cease to exist, as the cost to borrow for municipalities and state government will skyrocket. After all, would you loan money to someone or something that had little prospect of paying you back? Perhaps, but only at astronomical rates of interest so as to cover your risk. Are you convinced yet of the epic badness of the proposition? If not, then perhaps you are impervious to reason or suffer from some equally unfortunate malady that precludes a sense of self preservation. I hope not, because the price for voting out the state income tax is far far too high.

1 comment:

Thai said...

Just going thru your blog postings. While I agree with your general point, I think the main issue 'conservatives' have with govenment spending is the fact that the govenment workers seems to have gamed the system in the same way that rich tycoons have. The 'risk' inherent in life is not equally shared with government workers and private sector workers.

If Mass passed a law that said government workers have exactly the same retirement benefits, job security, and health care security/benefits as the median Mass resident, regardless of what laws are passed, I think there would be less bickering.

But governement workers of course will not accept this. Politicians and regulators seem to pass whatever law they will (even if well intended) and if the effect is that it worsens the situation for the median private worker, that seems to be just "too bad".

Were the government to pass a law that says: "regardless of the law and policy that is pass, government employees will get the average of everyone else" I think there would be less acrimony. Issues of 'assymetric risk' or 'moral hazard' always go two ways.