(1 cent increase equals a 20% increase! – promoted by Cool Cal)
Small-town mayors, liberal legislators, and deeply worried advocates for the poor launched impassioned campaigns yesterday to increase the Massachusetts sales tax to offset severe budget cuts, but business groups and residents immediately warned that Beacon Hill leaders will pay politically if they raise taxes in the midst of a historic recession.
While legislative leaders remained noncommittal, nearly three dozen House Democrats met behind closed doors yesterday to hammer out budget amendments, with consensus beginning to develop around pushing a sales tax hike and new local-option taxes. The tactic most commonly bandied about has been increasing the state’s 5 percent sales tax to 6 percent. Resistance to the idea was swift and strong.
“It would be disastrous for the retail sector,” said David Didriksen, who owns Willow Books & Café in Acton and is a member of the board of directors of the Retailers Association of Massachusetts. “To me that’s the worst idea since New Coke. At the very time we need to have the least number of hurdles we can, they’re going to drive consumers to New Hampshire and the Web.” New Hampshire has no sales tax; sales taxes are not collected on most Internet sales.
The Beacon Hill Institute released a study yesterday suggesting that increasing the sales tax would cause consumers to spend less money, resulting in 10,182 job losses and $41.3 million less in spending by businesses.