NewburyportNews.com, Newburyport, MA

Local News

January 18, 2013

Support seen for gov's tax plan

Gov. Deval Patrick’s proposal to lower sales tax while raising income tax rates is meeting with both praise and skepticism in the region, which competes with “tax-free” New Hampshire on a daily basis.

Admitting “there’s no good time to raise taxes,” in his State of the State address Wednesday night, Patrick proposed one of the largest tax increases in recent memory, raising the income tax from 5.25 percent to 6.25 percent, a level unseen since at least before the 1967, according to records from the Department of Revenue. It would also be the first time the governor, or Legislative leaders, broached the topic of raising broad-based taxes since 2009 when the sales tax was increased to 6.25 percent.

If approved by the state Legislature, the 19 percent increase in the income tax would net the state an additional $2.2 billion in annual revenue. The additional money would increase spending for education and the maintenance and repair of the state’s faltering transportation infrastructure.

To offset some of the burden placed on residents by the income tax increase, Patrick also proposes the Legislature reduce the sales tax from 6.25 percent to 4.5 percent, a 28 percent reduction. The loss in state revenue in this area will cost the Commonwealth about $1.1 billion.

The governor further proposes eliminating some corporate tax deductions worth $200 million, netting the state $1.9 billion in annual new revenue. Patrick may also call upon legislators to double the personal tax exemption, and to eliminate a number of “special favors” in tax code to broaden the tax base.

According to long-time Newburyport retailer Ed Gronbeck, who with his wife, Diane, own Market Square’s Brass Lyon, any lowering of the sales tax is a good thing.

“We’d be happy to see the sales tax go down to 4.5 percent,” Gronbeck said. “We compete with stores across the border, and I think this could make a difference. Sales tax, for some people, is an issue.”

Text Only | Photo Reprints

Port Pics
AP Video
U.S. Paratroopers in Poland, Amid Ukraine Crisis US Reviews Clemency for Certain Inmates Raw: Violence Erupts in Rio Near Olympic Venue Raw: Deadly Bombing in Egypt Raw: What's Inside a Commercial Jet Wheel Well Raw: Obama Arrives in Japan for State Visit Raw: Anti-Obama Activists Fight Manila Police Motels Near Disney Fighting Homeless Problem Michigan Man Sees Thanks to 'bionic Eye' Obama to Oso: We'll Be Here As Long As It Takes Bon Jovi Helps Open Low-income Housing in Philly S.C. Man Apologizes for Naked Walk in Wal-Mart New Country Music Hall of Fame Inductees Named 'Piles' of Bodies in South Sudan Slaughter SCOTUS Hears Tv-over-Internet Case Chief Mate: Crew Told to Escape After Passengers
Special Features