NewburyportNews.com, Newburyport, MA

Opinion

July 11, 2013

Tax man taking another bite

(Continued)

Lawmakers are also looking to gain about $160 million from a tax on certain computer services, billed by supporters as a “business to business tax” that will have no direct impact on consumers. Yet its full implications don’t seem to be widely understood.

“State leaders could hardly have chosen a more perfect tax to undercut the future of the Massachusetts economy. This is the most sweeping computer and software services tax in the nation. It strikes at the heart of the state’s innovation economy and will stifle job creation for years to come,” said Michael Widmer of the Massachusetts Taxpayers Foundation. He estimated software design businesses will pay as much as $500 million in new taxes under the deal, far more than the $160 million lawmakers are expecting.

The last of the taxes will hit a group that’s already been heavily taxed -- smokers.

Smokers have no doubt gotten used to being turned out and tapped out by society -- forced out of restaurants and bars, pushed out of most every public indoor space, shunned in many outdoor public spaces. They have also become easy pickings for tax hikes, and they are about to take another hit for their habit. Under the tax plan, the tax on a pack of cigarettes will be $3.51, second only to New York’s $4.35.

Nevermind that Massachusetts spends only a tiny fraction of the money it collects on cigarette taxes to actually help smokers stop smoking. The state is profiting from smokers’ addiction, and it’s anticipating $117 million in new taxes... to be spent on highway repair. Keep on puffing away, smokers, we’re counting on you to fix our potholes!

Citizens don’t have to set the way-back machine for very long ago to recall the 2008 “crisis” that resulted in a substantial increase in the sales tax, to 6.25 percent. It was a particularly hard blow for businesses here that must compete with “tax free” New Hampshire. That sales tax solution to the state’s temporary financial crisis has become a permanent drain on our wallets. And it wasn’t enough. Now we have another set of taxes proposed to solve our highway problems.

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