Taxes and Spending

Date: May 16, 2014

NFIB has led opposition
to higher taxes for small businesses. The Massachusetts House and Senate
rejected the Governor’s $1.9 billion tax proposal with a higher income tax rate
(6.25%) and fewer income tax deductions partially offset by an increased
personal income tax exemption and a lower sales tax rate (4.75%). But the
legislature has adopted a much smaller $500 million tax increase which includes
a three cent increase in the gas tax tied to inflation in the future, a $1.00
per pack increase in the cigarette tax, higher taxes on utilities which are
likely to be passed onto consumers in the form of higher utility bills, and the
now infamous expanded sales tax on computer and software services. NFIB
supported the repeal of the computer software tax and the legislature voted to
repeal the new tax less than three months after adopting it.

The legislature also
ended the diversion of gas tax revenues (2.3 cents per gallon) to other
purposes consistent with NFIB’s position in support of the use of gas tax
revenues solely for the repair and maintenance of roads and bridges. Higher gas
taxes will adversely impact small business owners, especially those who use
multiple vehicles in their business or provide or need computer services. NFIB successfully supported the ballot initiative repeal of the indexed of the gas tax.

The Governor’s original proposals to increase
taxes would have impacted everyone and had an even greater economic impact.
That is why the defeat of the Governor’s tax plans was a big victory for our
members.

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