BOSTON (WWLP) – The growing gap between the wealthy and everyone else has taken a hit on the state tax revenue according to a report released Monday by Standard and Poor’s.
“The balance of taxes paid by the middle class and the poorest among us has grown, while the share of taxes paid by the wealthiest has declined,” said State Committee on Revenue Chairman Jay Kaufman (D).
Wealthy Americans have the means to shield their income from taxes. The report claims they also spend less compared to the others, affecting the sales tax revenue. No matter if you’re rich or poor, everyone in Massachusetts pays 5.2% of their income to tax.
Chairman Kaufman believes a graduated income tax system could be a so-called “fix;” how much you make would determine how much you pay in taxes. The President of the business-backed Massachusetts Taxpayers Foundation argues that it would only target the upper-class.
“I think the proponents, many of them of the graduated income tax really want to be able to raise taxes on the higher income people without having to raise taxes on everybody,” said President Michael Widmer.
The issue of income inequality is proving to be problematic for state lawmakers, and ultimately you, who have to choose between raising taxes or slashing spending.
Changing our current income tax system would not be an overnight fix either. It would require the legislature to act and get approval by the voters.