[EDITORIAL] Massachusetts sales tax holiday not worth it

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  Posted Jul. 25, 2015 at 9:00 AM 

  
  

  NORWOOD

  It’s late July, so that means there’s the annual last-second buildup for a sales tax holiday weekend in August.

  The idea touted by the Massachusetts Retailers Association is in favor of such a weekend, arguing it keeps money in the state that would be spent in New Hampshire or online.

  The MRA asked the Beacon Hill Institute to measure the economic impact of the holiday.

  The study is based on the responses of 63 business owners asked by the MRA how the reprieve impacts their shops. Having the business association handpick owners’ answers is in not a good way to measure impact, as the MRA could have stacked the deck in emailing business owners to get favorable results.

  Even then, the owners’ responses were lukewarm, at best.

  The answers in favor of the concept are all the standard answers that don’t really have any specifics. They’re all vague generalizations like “it stimulates the economy” or “people spend more than they otherwise would have.”

  The answers from owners who aren’t in favor are more telling.

  “There is no cash flow for three weeks before,” one owner wrote.

  Another stated “five weeks of business are crammed into two days” and that the totals don’t match five normal summer weeks.

  A majority of business owners, 60 percent, stated in the survey they believe any sales from the weekend came from other weeks in the year, not money that would have been spent out of state.

  That means the holiday isn’t any sort of economic boost, just a rearranging of when purchases would occur.

  Only 13 percent said the sales come from the boogey men of “tax-free” New Hampshire and the Internet.

  One of the major points the paper points out is that 72 percent of shoppers were at least somewhat likely to spend in state if there were a holiday. The question was leading at best.

  There was no response in that question indicating whether to indicate if a responder was not planning to partake, just whether it would make a difference between shopping in state or elsewhere.

  Another question found that 68 percent of respondents hadn’t taken advantage of the holiday. While no one likes paying taxes, savvy shoppers can find better deals on other weekends.

  The institute concluded the weekend generates the equivalent of about 627 jobs. Realistically, employers aren’t hiring new workers to deal with the supposed benefits, but just scheduling more hours to their current work force. That works out to about six hours for every one of the 225,000 retail workers in the state.

  Via: Wicked Local Norwood

  
  
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$132 Billion in New Taxes/Fees Proposed by CA Legislators … So Far

As the Legislature nears the June 15 deadline for sending a budget bill to the governor, the California Taxpayers Association released “Tax Watch,” a report detailing $132 billion in new taxes and fees that have been introduced by lawmakers so far during this legislative session.

The report includes every bill introduced so far this session that would impose or authorize higher taxes, fees or tax-like “fees” estimated by state officials to generate $5 million or more per year in net revenue.

State revenue increased more than $10 billion this year under our existing tax structure, but that hasn’t stopped some lawmakers from asking for even more. With tax revenue surpassing expectations, and the state’s rainy day fund now in place to help weather future storms, this is not the time to be proposing $132 billion in new tax and fee increases. 

The most expensive proposal for taxpayers is Senate Bill 8 (Hertzberg), which would extend the sales and use tax to cover services (including veterinary services, auto repairs, gardening and music lessons).

The State Board of Equalization, which administers the sales and use tax, estimates that this change alone would cost taxpayers $122.6 billion every year, on top of all existing taxes.

To prepare “Tax Watch,” CalTax reviewed every bill introduced or amended from December 1, 2014, to May 29, 2015. In cases where two or more bills proposed similar increases (for example, four bills proposed taxes on marijuana), the cost was counted only once for purposes of calculating the total amount of taxes and fees proposed during this session.

Teresa Casazza is president of the California Taxpayers’ Association

Via: California Political Review

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New Bill Would Allow Cities to Ratchet Up Sales Taxes Even Higher

Although Californians already pay some of the highest sales taxes in the nation, a bill that recently passed the Assembly paves the way for the sales tax to go even higher.Assembly Bill 464 increases to 3 percent (from the current 2 percent cap) the maximum sales tax rate that can be levied by local governments.

That potential 3 percent sales tax levied by cities and counties is in addition to the statewide 7.5 percent sales tax, which could result in a combined 10.5 percent tax in some areas of the state. Tax hikes require majority voter approval for general purpose levies and two-thirds approval for special purposes.

The average state and local combined sales tax in California is 8.5 percent, according to a recent report by the Legislative Analyst’s Office. The lowest rate of 7.5 percent predominates in rural counties, while the highest rates are in urban areas. Residents in eight cities in the Bay Area and Los Angeles County are currently paying a 10 percent sales tax because their counties have received exemptions from the 2 percent cap.

“AB464 is about local control and flexibility,” said the bill’s author Assemblyman Kevin Mullin, D-San Mateo, on the Assembly floor May 14. “It gives local voters the ability to raise revenue to fund important public services, including transportation, public safety and libraries. This bill is crucial, because if just one city in a county reaches the [2 percent] cap, then the entire county is precluded from having voters raise any additional taxes, hindering key transportation projects or attempts to enhance public safety.

Via: California Political Review

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California: Against All Odds, Conservatives Defeat Modesto Tax Measure

Ten California cities had sales tax measures on the ballot on November 5^th and nine of them passed by significant margins.  Only Modesto’s tax measure was voted down and I’m here to tell you how a bit about how it happened.

The campaign for Measure X, a one percent sales tax increase tied to a non binding city council resolution calling for the bulk of the new revenue to be spent on police and fire, was spearheaded by Mayor Garrad Marsh and funded almost entirely by the public safety unions.  Being a general tax increase with a caveat, similar to a measure in neighboring Stockton, Measure X required a simple majority to pass.

With Modesto’s finances in a $6 to $11 million dollar hole depending on who you asked and, like most municipalities, facing crippling pension costs, the mayor and city council tossed the measure together late last summer and got it on the ballot.   Police and fire unions began pouring money into a campaign to pass the measure and, by early September, no organized opposition had formed.

Knowing a bit about Modesto’s finances as I do, something had to be done.  With little time to organize a campaign I turned to the Stanislaus Taxpayers Association and their President, Dave Thomas.  Dave and I quickly formed a plan to fight the measure with whatever means we could muster.  We were against quite a juggernaut, facing both the City of the Modesto and the public safety unions who had already raised over $100,000 and pledged at least $50,000 more.

Early on we were confronted with all the things a tax-hungry city will do to influence a municipal election that promised a waterfall of newfound cash.  In the spring the city had commissioned a $35,000 survey to gage support for the measure, a push poll that unsurprisingly showed overwhelming support.  The survey was later handed gratis to the Yes on X campaign who proceeded to hire the same consultant who took the poll.  When the Taxpayer’s Association asked for a copy of the publically funded poll they were told to take a hike.  The city later relented under pressure but have yet to charge the Yes side for the poll.  Later, the City of Modesto stuffed pro Measure X propaganda into the city water and garbage bills.

Va: California Politica Review

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