An idea worth exploring...Posted Wednesday, January 5, 2011, at 8:33 AM
Usually, we don't give much credit to the Tea Party movement, but the state organization of that conservative philosophy has put forward a good idea -- at least in principal.
Tea Party candidates elected to the legislature have indicated they will push for a reduction in the state sales tax, noting -- correctly -- that it disproportionately lays a heavier tax burden on the poor and senior citizens trying to survive on a fixed income. The legislators of that movement want the sales tax reduced to 4 percent from the current 6 percent.
To make up for the loss in revenue, they propose eliminating a large number of tax exemptions that are on the books. They don't specify which exemptions, and therein may lay the rub, as the devil is always in the details, but over the years special interest groups have convinced the legislature to create a huge body of specialized state income and luxury tax exemptions. It seems reasonable that many of them could be eliminated, generating significant revenue to the state.
So, in principal, their idea has merit. The question is, can they identify -- and get removed -- exemptions that won't hurt the middle class and small businesses, while still raising the almost half a billion dollars in revenue their sales tax cut would cost.
This won't be an easy year for the legislature. The economy is slowly starting to turn around, so revenues will be up slightly, but the state must restore education funding to at least 2009 levels, while maintaining other vital services. There isn't much fat left to cut from the state budget, so looking at eliminating some specialized tax exemptions is a good place to start finding the revenue needed.
There is no question the tax code needs to be simplified, at both the state and federal level, and that means special-interest exemptions have to go.
This is an idea worth exploring.
Showing most recent comments first
[Show in chronological order instead]
Meanderings of the Managing Editor
- Blog RSS feed
- Comments RSS feed