Thought of the Day - 11/27/09

I hope that you and your family enjoyed a wonderful Thanksgiving holiday.

There are several political issues related to the holiday weekend that are somewhat interesting.

At the beginning of November, the Mass. Turnpike Authority was eliminated and its responsibilities were transferred to a new state agency, under a transportation reform bill passed earlier this year. Wednesday’s pre-holiday commute gave us the first opportunity to measure improved efficiency under the new system. In particular, the Department of Transportation vowed to improve holiday traffic flow to avoid problems like those experienced during the Easter weekend earlier this year.

The result? Well… drivers on the Mass. Turnpike confronted a 45-mile traffic jam going westbound. I don’t know what you think, but if you were one of the drivers caught in that traffic jam, I’m guessing you don’t feel that state government “efficiency” is working to your benefit.

It looks like the same sort of problem existed over at MassPort yesterday. There was a six-hour flight delay for some passengers at Worcester Regional Airport (operated by MassPort). Travel delays around the holidays are common, of course, but passengers reportedly got most frustrated because airport officials did not inform them of the likely cause and duration of the delay, leaving them unable to make alternate arrangements.

Today, it’s back to work for some, including many retailers for whom this day has come to be known as “Black Friday.” Others who have the day off are looking to take advantage of some of the bargains available at local stores.

There’s an interesting editorial in today’s Boston Herald that talks about Black Friday. Specifically, the editorial notes efforts that New Hampshire is making to lure Massachusetts residents across the border for tax-free shopping with incentives to stay overnight and shop more. The editorial mentions that Massachusetts retailers have little they could offer in return, since it’s illegal for businesses here to waive the sales tax, and since hotel stays are getting more expensive due to higher taxes.

One thing the editorial doesn’t mention is the fact that Massachusetts residents’ desire to shop tax-free across the border (which Massachusetts law forbids, by the way) is being driven in part by the fact that our state increased the sales tax this past year to 6.25 percent.

This is a perfect example of the way higher taxes hurt not just consumers but also businesses. Because of the tax increase, more and more sales likely will find their way across the border this holiday season. Even if consumers follow the law and end up remitting the sales tax back to the state when they file their taxes in April, these sales are forever lost to Massachusetts businesses that are relying on them to survive. And ultimately, that will mean either higher prices here in the Bay State or fewer jobs – or both. Taxes have real-world consequences for those who have to pay them, and that always makes tax increases an even more costly decision.

Unfortunately, it seems like the Patrick administration is not getting this message. There was news on Thursday that the state is planning to double taxes that employers pay to cover health insurance costs for workers who are laid off. Michael Widmer of the Massachusetts Taxpayers Foundation says the tax increase is “going to be a major blow to employers” in Massachusetts.

All of these stories point to a lack of coordinated leadership at the state level and to poor decisions being made by those in charge of policy. We need to start making better choices when it comes to our tax policy, and we need to start enacting real reforms that will actually improve the efficient operation of government – without asking people to pay more for the same old services.

What do you think? Please post a comment below.