Slash the Sales Tax

In less than three short weeks, Massachusetts residents will go to the polls in order to address three important ballot referendums. Questions 1 and 3 deal with the issue of the Massachusetts state sales tax. Question 1 is a binding referendum vote on whether the state sales tax on alcohol should be eliminated. Question 3 is also a binding vote, but it is on the reduction of the state sales tax for everything else from 6.25 percent to three percent. Both ballot questions will reduce the tax burden on one of the most over-taxed states in the Union during one of the toughest economic times in recent years. Furthermore, the reduction of the sales tax will act to stimulate the local economy, and local businesses will benefit from increased revenue. As a consequence, employment and wages will also increase as a result of the increased profits for local establishments. First, I will address Question 1 and the local tax on alcohol. Right now, alcohol in Massachusetts is taxed at a higher rate than almost any other state in the country. In addition to taxes levied during its manufacture, Massachusetts levels an excise tax at the wholesale level and a sales tax at the retail level. Many students are probably wondering, I don’t drink, so why should I care? Although the alcohol tax does not affect you directly, it affects the local economy, which affects you. If we repeal the sales tax on alcohol, our alcohol will be taxed at a more fair and competitive rate that will help to return business to local stores—while saving the energy consumed to import beer from out of state. Additionally, the increased business will allow companies to give back to their community—our community. A somewhat similar argument I applied to Question 1 can be generalized for Question 3—which is a vote on the reduction of the state sales tax from 6.25 percent to three percent. Right now, everything that is purchased in the state of Massachusetts is taxed at 6.25 percent with only one exception. The exception to the tax is anything considered by the state to be a necessity, such as food from the grocery store, clothing and medicine. Included in the tax is everything from cars and boats to Starbucks, textbooks, pens and paper—all of which is taxed at 6.25% percent. This may not seem like very much to you, but if the average Andover student spends $1000 per year, not an unreasonable amount considering the price of textbooks or ordering pizza, then the Massachusetts government collects $62.5 from every student. With over 1,100 students, we give well over $60,000 per year to the state of Massachusetts. Just think about how we could have used half that money in the philanthropy undertaken by our students, such as Aid in Haiti, Local Youth Programs, Darfur. Additionally, money not collected by the state will go to local businesses, which will benefit from an increased competitive advantage and consumer demand. Instead, all of that money goes to waste in order to stuff the state budget full of unneeded legislation. Governor Patrick and the state political machine have already gone on the offensive in order to protect their special interests. They have threatened to close state prisons and release dangerous criminals onto the streets because of a budget shortfall. Additionally, they have warned that state aid to local municipalities will be slashed, resulting in teacher layoffs, streetlight shutdowns, curtailing of emergency services and the elimination of everything that people look to the government to provide. The truth is that these are ridiculous scare tactics employed by desperate incumbents in order to frighten an uninformed public into voting to keep their taxes high. While it is no secret that Massachusetts is facing a budget shortfall, it is necessary to lower taxes in order to force the government to lower spending. Does the Governor really need a Director of Grass Roots Governance, a Cadillac or new office drapes? Do we really need toll-takers, who on average earn more than your typical classroom teacher? Cutting state taxes will force accountability onto the Beacon Hill because they will face the wrath of an already enraged electorate if they don’t stop spending. It’s time that the government stops taxing and starts using its resources more efficiently. Another common argument against cutting that state sales tax is that a slashed tax will unfairly favor the wealthy—a charge which is completely untrue. A sales tax is perhaps one of the most equitable and fair taxes possible, in that it does not discriminate on the basis of income. Everyone, rich and poor, pays the same tax on everything they purchase. A cut in the sales tax would benefit everyone, from minimum wage employees to millionaires. A slashed sales tax would also benefit the lower-income population indirectly as well. Increased business revenues would lead to additional hiring and wage increases for those employees. Who wouldn’t win? Those who milk the government cow without producing anything in return, but certainly not you, if you run to CVS on Saturday. Chris Kent is four-year Senior from Lynnfield, MA.