Mass Revolution Now!

Another member of Massachusetts’ reality based community. Maybe honesty IS the best policy.

April 27, 2006

Trav’s Tax Cut Premature

by @ 8:32 am. Filed under Massachusetts, Social Policy

I meant to write about Trav’s tax cut yesterday but didn’t find the time. I would like to respectfully disagree, at least temporarily, with David over at BMG. I say temporarily because not enough info has been released. Based on what is known, I think the tax cut is the wrong way to go. First the plan costs $70 million a year. This isn’t an overwhelming expense but considering the budget isn’t even structurally balanced, we shouldn’t be handing out tax cuts. (The current budget released by the Ways and Means committee takes some $270 million from the rainy day fund in order to “balance” the budget making the budget structurally unbalanced because the projected revenues are not enough to cover the $270 million taken from the fund. Current projections show that revenues will only be about $200 million more than the legislature is budgeting.) In addition to not being fiscally sound we must also consider the “relief” that is going to be had by middle- and lower-class families. The best case scenario only projects about $250 extra in the hands of families. Now an extra $250 is not something to sneeze at but no one seems to be asking is at what cost on services will the $250 come at. Does the $70 million price tag mean that other services, of a value greater than $250, are going to be cut or reduced? Budgets are give and take and to slip in a $70 million line item it is reasonable to infer to services are going to be cut. My thought is familes are more in need increased services that can help them defray costs in a variety of areas than they are of a quick $250 in their pockets. The other problem I have is that if you look at some hypothetical projections the families with two children will only get around $150. Is that worth the $70 millon price tag? If Trav can show that his tax cut won’t reduce services and will give real help, not nominal help, to families then I he has my full support. As things stand now I think this jesture rings more hollow than true.

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