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BHI's Weekly Dispatch: Injecting the truth about higher taxes into the conversation

by: Beacon Hill Institute

Fri May 06, 2011 at 13:09:35 PM EDT

A tax package proposed this week by several progressive Democrats that would raise the PIT to 5.95% from 5.3%
would destroy almost 15,000 private sector jobs in Massachusetts while adding 2,600 public sector employees. This is the finding of a preliminary analysis of the tax package by the Beacon Hill Institute at Suffolk University.

Using its trademark State Tax Analysis Modeling Program (STAMP), the Institute also found that the tax increases will most likely only generate $1.04 billion in revenues not the $1.37 billion projected by the authors of the proposed legislation.

This week Senator Sonia Chang-Diaz (D-Boston) and Rep. James O'Day (D-Worcester) and other liberal legislators filed the bill which would -- among other initiatives -- make the state's tax system more progressive without changing the state's constitution. The bill raises the "personal exemption enough to hold down increases for middle-class families."

Advocates who testified in favor of the tax package this week at the State House insist the state needs more revenues to fund education, health care and other popular programs.

The Institute only modeled the income tax and personal exemption proposals.

The increases under "An Act to Invest in Communities," would extend beyond the personal income tax. The bill would also increase the long-term capital gains tax from 5.3 percent to 8.95 percent and bring down the higher bound of capital gains to the same rate. Those shorter-term rates are now taxed up to 12 percent. Low-to-middle income seniors would be granted a tax exemption on capital gains tax if they earn less than $40,000. All the changes would take place on January 1, 2012.

The tax increases will also put a damper on private spending. The Institute's model also
found that taxpayers would have $1.42 billion less in disposable income.

Supporters of tax increases are inclined to highlight the static revenue effects. But the economy doesn't work the way they imagine. Any honest discussion must include an estimate of how the state's economy will respond to tax increases since they do not exist in a vacuum. Consumers, investors and taxpayers often change their behavior in response to higher taxes, thus exerting a downward pull on growth.  

Over the years, Massachusetts has been modestly successful in restraining the tax collector and improving the state's overall competitiveness and its ability to keep a wide variety of businesses. "The Act to Invest in Communities" will most certainly impede economic growth.

Supporters should be asked to defend the timing of an increase. Because taxpayers and investors respond negatively to tax increases, most economists recommend against raising taxes during downturns.

Not to be discounted is the effect on other taxes, particularly local ones. When state government raises taxes local governments also collect less revenue. BHI estimates local governments will lose about $43 million as a result of the tax increases.  

The BHI STAMP model is a computable generalized equilibrium model that accounts for the economic effects of tax policy changes. A CGE model is specified in terms of supply and demand for each economic variable included in the model, where the quantity supplied or demanded of each variable depends on the price of each variable.  

Tax policy changes are shown to affect economic activity through their effects on the prices of outputs and of the factors of production (principally, labor and capital) that enter into those outputs.

The Institute will provide a more comprehensive analysis of the entire Chang-Diaz-O'Day proposal at a later date.

Discuss :: (0 Comments)

Critical Mass: Top 10 Reads of the Week (Morte d'bin Laden Edition)

by: CriticalDan

Fri May 06, 2011 at 09:58:56 AM EDT


The Secret Team That Killed bin Laden - Marc Ambinder (National Journal)

From Ghazi Air Base in Pakistan, the modified MH-60 helicopters made their way to the garrison suburb of Abbottabad, about 30 miles from the center of Islamabad. Aboard were Navy SEALs, flown across the border from Afghanistan, along with tactical signals, intelligence collectors, and navigators using highly classified hyperspectral imagers.

After bursts of fire over 40 minutes, 22 people were killed or captured. One of the dead was Osama bin Laden, done in by a double tap -- boom, boom -- to the left side of his face. His body was aboard the choppers that made the trip back. One had experienced mechanical failure and was destroyed by U.S. forces, military and White House officials tell National Journal... Read the Rest

There's More... :: (0 Comments, 37 words in story)

Pew poll and Political Typology.

by: tomasek1000

Thu May 05, 2011 at 16:19:51 PM EDT

(While this data is interesting, it is of Adults and not likely voters, nor eve registered voters. - promoted by Rob "EaBo Clipper" Eno)

Interesting bit about viewpoints of various political types. I was not familiar with this research by them, but looks interesting in helping to define our party and our electoral strategy.

Headline is about the Osama bump for Obama, but there's more

Discuss :: (4 Comments)

No, really Senate Ds. We taxpayers LOVE to be patronized.

by: CriticalDan

Thu May 05, 2011 at 18:41:36 PM EDT

The state Senate's intrepid pro-tax advocates went back on the offensive today, having apparently decided that the best way to gain support for their effort to achieve broad-based tax hikes during a recession is to patronize taxpayers.

"Tax bill supporters press for 'adult conversation' on revenues, services," reads the headline in the State House News.

Sen. Sonia Chang-Diaz and Rep. James O'Day led a coalition of Democratic lawmakers and advocates on Thursday in pushing for an income tax and capital gains tax increase to avoid the risk of deep cuts to education and social services even as the economy shows signs of rebounding.

The legislation, which has drawn 19 co-sponsors from both the House and Senate, would generate $1.37 billion in additional revenue, supporters said, by shifting the tax burden from the middle class to wealthier residents.

While Gov. Deval Patrick and leaders in the House and Senate have pledged not to increase taxes this budget cycle, supporters vowed victory on Thursday, and the chair of the Revenue Committee Rep. Jay Kaufman, said it was "time to have this conversation."

"We are jeopardizing the future of our communities if we try to close this budget gap by cuts alone," said Chang-Diaz, a former school teacher from Boston.

Offering testimony at the State House, advocates said the bill authored by Chang-Diaz and O'Day would create a more fair and progressive tax system by asking the wealthy to pay more of their income while increasing deductions for lower and middle class families.

I suppose at some point a political consultant told a Democrat that calling for an "adult conversation" is a good way to win hearts and minds.
There's More... :: (10 Comments, 144 words in story)

MASSterList: Gambling's back, so back - Lenk confirmed for SJC - Worcester 6th coming to a head

by: Massterlist

Thu May 05, 2011 at 10:02:28 AM EDT

GAMBLING: Expanded gaming is officially back in fashion. Yesterday's gambling hearing was long (MetroWest), familiar (MassLive) and uhh (WWLP), long (T&G). The A.G. says the law will need to be cleared up if we end up with casinos (T&G). A Wampanoag leaders says he doesn't need a gambling bill anyway (BBJ).

BIG MONEY, NO WHAMMIES: What do you do when you find money you didn't know you had in your pockets? How about $580 million? The BBJ takes a look at what to do with unexpected state revenues. The righty bloggers have their own ideas.

THE LONGEST RACE: The T&G has two stories on the candidates in the Worcester 6th.

SJC: After a close Governor's Council vote featuring some vocal dissenters, Barbara Lenk is headed to the SJC. (AP)

TWASTING TWIME: Check out the suggestions the Twitterati came up with for why Mayor Setti Warren needs to rent a venue and won't say why.

Read the rest of the MASSterList, including the Mitt Monitor, today's legislative headlines, transportation news, new health care headlines, today's Best of the Blogs and more by signing up for daily email at


Discuss :: (0 Comments)

Found Money(?)

by: CriticalDan

Wed May 04, 2011 at 16:04:25 PM EDT

Massachusetts collected $587 million more than expected in taxes last month.  That is good news.  It might also be bad news.

Already interest groups that have felt the sting of the budget knife are clamoring for the "windfall" to be used to restore chopped funding.  The State House News's headline is ominous: "April tax windfall creates new questions: what to do with it?"

There's More... :: (9 Comments, 235 words in story)

Two abortion-related bills deserve attention

by: KrisMineau

Wed May 04, 2011 at 12:48:19 PM EDT

The topic of the taxpayer-funded Maria Talks website has been covered extensively on this blog, but there are two bills that will get a hearing next week before the Joint Committee on Public Health. (In the name of brevity, I am only writing about two of the numerous bills before the committee next week.)

Research has conclusively shown that a preborn child can feel pain in the womb. This is a fact. And there is nothing more painful, for the preborn baby and its mother, than an abortion. Yet, Massachusetts law does not require physicians who perform abortions to provide anesthesia for the baby.

HB 3295, sponsored by Rep. Vinny deMacedo (R-Plymouth) and other legislators, would provide this simple compassionate act for a preborn child. Intentionally inflicting pain on a child outside the womb is criminal child abuse. Why is a human being still within the woman not afforded the opportunity to die without pain? 

At the other end of the spectrum, a bill put forth by Rep. Ellen Story (D-Amherst) would lower the age of consent for an abortion from 18 to 16, a direct assault on the rights of parents and the health of young women. In Massachusetts, you can’t get a tattoo without parental consent if you are under 18, never mind an abortion!

But the lurid saga continues. Rep. Story’s bill, HB 629, while lowering the age of consent to 16, would also simultaneously weaken the parental consent requirements. Today, only both parents (or legal guardians) or a judge can give consent for a girl under 18 to have an abortion. Under Story’s bill, a single parent or guardian, another adult family member, a judge, or a “mental health professional,” for example a school nurse, could grand consent.

Hopefully this bill will never see the light of day, but it is scary to think that it is even being considered. Abortion advocates insist that they always put women first, but when you are advocating for legislation that would allow an underage girl—potentially one that has been abused or the victim of statutory rape or incest—to receive an abortion with the consent of simply a school nurse or an incestuous adult family member, your priorities are obviously in the wrong place.

I encourage you to contact the members of the Joint Committee on Public Health. Ask the members to support the commonsense bill HB 3295 to spare preborn children the physical pain of abortion, and oppose HB 629 to spare underage girls the emotional pain of abortion without the support of their mother and father.

CLICK HERE to see the other bills of interest to pro-family citizens.
Discuss :: (1 Comments)

MASSterList: Gambling debate back on Beacon Hill - Senate begins budget talk - Setti Warren venue?

by: Massterlist

Wed May 04, 2011 at 11:16:53 AM EDT

GAMBLING ADDICTION: What's old is new again on Beacon Hill: Welcome back (WBUR), Gambling debate (MORE: Sun, AP)! We missed you. So what's different this time around? Western Mass. developers have clear plans for casinos in Holyoke and Palmer (MassLive) and a new study shows how much Massachusetts citizens are contributing to the gambling industries of adjacent states (WWLP).

THE BUDGET GAME: After monthly revenue numbers went through the roof (MassLive), the Senate budget debate (AP) is beginning to look interesting. Gov. Patrick says he's looking for middle ground in the battle (WBUR). MORE: Salem News

GUESSING GAME: Gee, why would Setti Warren need to book an event at the same Legion hall he announced his mayoral bid in? (Newton Tab) Guesses are to be tweeted with #settivenue.

Read the rest of the MASSterList, including the Mitt Monitor, today's legislative headlines, transportation news, new health care headlines, today's Best of the Blogs and more by signing up for daily email at



Discuss :: (0 Comments)

This Week at Pioneer

by: Pioneer_Institute

Wed May 04, 2011 at 09:55:17 AM EDT

Steve Poftak, Research Director, had an op-ed in yesterday's Fall River Herald News on municipal health care reform, which is so important for cities struggling to control the share of their budgets consumed by rising employee benefit costs.

Steve also had an op-ed in yesterday's MetroWest Daily on the lessons for economic  development policy from our experience with Evergreen Solar. http://www.metrowestdailynews....

Pioneer looks at the House Ways and Means budget and concludes: we're STILL kicking the can! Read why:

Josh Archambault takes a closer look at one aspect of this budget trickery - Medicaid spending. He asks, can we really reduce per enrollee spending by 3.5% this year?

Blogger Michael Morisy asks why the Governor has reneged on his promise of a "more modern and accessible and accountable" government. Morisy also mentions secrecy pacts uncovered by a Globe reporter. Read more here:

Jim Stergios has a post on the MA Ed. Dept.'s latest backslide on a testing requirement for  US History. Check it out: http://www.pioneerinstitute.or...  

Pioneer released the remarks of education expert E.D. Hirsch, delivered at a Northeastern education policy course taught by former MA Senate President Tom Birmingham. Both spoke at our March event, "Liberal Arts and Closing Achievement Gaps." In his remarks, Hirsch urges policymakers to focus more on building language proficiency in grades Pre-K through 3, and he and Birmingham warned against so-called "21st century skills" pushed by DC-based trade organizations. Hirsch said:

The first principle would be the supreme importance of grades pre-K through 3. Bill Gates has been spending billions on high school with essentially no national effect.

Read the transcript here:
And the press release here:

We hope that you'll visit us at: http://www.pioneerinstitute.or...  
And consider becoming more involved in our important work by:
- Attending our events
- Signing up for our e-updates
- Liking us (and commenting!) on our Facebook page
- Following us on Twitter and/or
- Making a donation http://www.pioneerinstitute.or...

Discuss :: (0 Comments)

Blogger Beware

by: The Angelic One

Wed May 04, 2011 at 09:30:11 AM EDT

My friend Richard Howe Jr. posted an interesting observation on his blog that should act as a warning/wake-up call to all bloggers regardless of their political views.

The New York Times yesterday reported that a company from Nevada, Righthaven LLC, has entered into an arrangement with Media News Group (the owner of the Lowell Sun and many other newspapers) whereby Righthaven scours the internet for people using copyrighted articles and photographs from Media News Group papers and, when they find such an instance, they get an assignment of certain rights from Media News Group and then immediately file suit against the blogger. A suit against a 20 year old young man with a severe disability who lives with his mother in North Carolina who had used a photo that had originally appeared in the Denver Post (a Media News Group paper) brought this practice into the national spotlight.

I'm not surprised by this episode; I'm just surprised it didn't occur sooner. I don't know if Righthaven's tactics will survive judicial scrutiny if put to the test but it will have a chilling effect on blogging. If anything, this situation underscores the importance of blogs/bloggers developing original content for themselves & the audience they cultivate. What say you, O denizens of Red Mass Group?

Discuss :: (5 Comments)

Cheers for Black Op Prisons and Enhanced Interrogation Techniques?

by: swamp_yankee

Mon May 02, 2011 at 19:17:17 PM EDT

(It seems that the waterboarding of Khalid Sheik Mohammed directly led to the trail of OBL getting hot.   - promoted by Rob "EaBo Clipper" Eno)

Will there be any cheers for black ops prisons and enhanced interrogation techniques? The Associated Press released this little blurb this afternoon, and it is an interesting little blurb:

WASHINGTON (AP) - Officials say CIA interrogators in secret overseas prisons developed the first strands of information that ultimately led to the killing of Osama bin Laden.

Current and former U.S. officials say that Khalid Sheikh Mohammed, the mastermind of the Sept. 11, 2001 terrorist attacks, provided the nom de guerre of one of bin Laden's most trusted aides. The CIA got similar information from Mohammed's successor, Abu Faraj al-Libi. Both were subjected to harsh interrogation tactics inside CIA prisons in Poland and Romania.

The news is sure to reignite debate over whether the now-closed interrogation and detention program was successful. Former president George W. Bush authorized the CIA to use the harshest interrogation tactics in U.S. history. President Barack Obama closed the prison system.

That kind of seems like an important piece of information to me. It will be interesting to watch how this information is treated by the mainstream media, assuming it is picked up by the mainstream media at all.

It may be unsavory to get political during this celebratory moment, but we all know who shut down those black ops prisons in Poland and Romania and who ended the use of those enhanced interrogation techniques. Can anyone say 'media blackout'?

Discuss :: (29 Comments)

Stephen Harper wins Majority Government

by: Rob "EaBo Clipper" Eno

Tue May 03, 2011 at 09:21:11 AM EDT

As many of you know, by birth I hold dual citizenship with Canada.  It's a good day today in our neighbor to the north.  The North American conservative movement, which won strong victories in the midterm elections in the United States, keeps moving along with Stephen Harper winning his first Majority Government.  The National Post has the story.

Stephen Harper's long term strategy has been to break the Liberal brand and drive a stake through the heart of the separatist movement in Quebec. Having won the 41st general election and seen both the Liberals and the Bloc Québécois tumble to humiliating lows, it was a good night for Mr. Harper.

But when the majority government was announced in the Telus Convention Centre, it turned into a great and historic night. Mr. Harper said he was humbled by the decisiveness of the result. "Canadians have chosen hope, unity of purpose and a strong Canada," he said. "We will be the government of all Canadians, including those who did not vote for us."

The mood in Calgary was one of relief. "It's been a long road - 25 years since Reform was founded," said John Weissenberger, a veteran Calgary conservative and close friend of the Prime Minister.

Mr. Harper himself defined victory as majority government - and failure to pass the 154 seat threshold would have left his future as the Conservative leader in question.

It's now our turn here in the states to keep this continental momentum going.

Discuss :: (4 Comments)

Elections Have Consequences: Now we all own Lawrence

by: CriticalDan

Mon May 02, 2011 at 23:08:47 PM EDT

Good God.

As if the drama playing out in Lawrence weren't already uncomfortably close to an episode of the Sopranos, now we have a video-taped beat-down, somewhat reminiscent of Ralphie's final scene, meted out to a prominent critic of Mayor Lantigua by a thug associated with one of the Mayor's allies in, um, the 'nightclub community.'  Read this from and then remind yourself that it's a news item, not a pitch for the next Scorcese film.

A prominent critic of embattled Lawrence Mayor William Lantigua says he was beaten by a 6-foot-9 nightclub bouncer who called him "a snitch" and the "man who took the mayor to court."

The weekend encounter, caught on videotape, left Antonio Arevalo with an arm broken in two places and spotlighted the deep divisions in the city under Lantigua, who has been feuding with police since he took office as the state's first Latino mayor last year. Bouncer David Figueroa works for La Guira, one of the nightclubs popular with the mayor; the club's owner has given $1,000 to Lantigua's political campaigns in recent years.

Mayor Lantigua has some well known issues.
There's More... :: (4 Comments, 306 words in story)

Want to know what Governor Patrick really thinks? All you need is premium cable

by: CriticalDan

Mon May 02, 2011 at 14:50:24 PM EDT

This really is pretty remarkable.  Last week, a number of Massachusetts political reporters tried, point-blank, to get Governor Patrick to take a position on the controversial municipal health reform provision passed by the House as part of its budget.  There's "room for debate," the Governor non-answered.  Both sides should "dial down" their rhetoric, he pontificated.

Then the Governor headed to Wisconsin, where he dialed the rhetoric way, way up.  And THEN he journeyed to Los Angeles to tape a quick appearance on HBO's "Real Time with Bill Maher," the premium cable political gabfest of choice among the glitterati.

There's More... :: (0 Comments, 313 words in story)

A Measured Relief

by: Rob "EaBo Clipper" Eno

Mon May 02, 2011 at 12:14:47 PM EDT

As someone who both lost a friend on 9/11 and has come to know the families of many more 9/11 victims over the years, I thought I'd be more joyous at the news of Osama Bin Laden's death.  For some reason, while I am most definitely relieved that Osama Bin Laden no longer walks the earth, I don't feel a resounding joy.  My relief is tempered by the notion of, "what comes next?"  

Al Qaeda has always been about more than one man.  Al Qaeda is purposely set up so that if one tentacle is cut off the beast can still operate.  While we severed a pretty significant tentacle last night, the beast is still alive.  

Multiple news reports today remind us that standing orders were given to sleeper cells to act upon the death of Osama Bin Laden.  One assumes those plans have been set in motion.  It is my hope that enough intelligence has been obtained to stop these attacks before they happen.

I am glad Osama Bin Laden no longer walks among us, although it is tempered by knowing his creation is still very much alive.  We must be ever vigilant.

Discuss :: (19 Comments)

Quick thoughts on a very good day

by: CriticalDan

Mon May 02, 2011 at 12:11:58 PM EDT

Thank you

I am writing this quick post on a plane, just a couple hours after hearing the news (I went to bed early last night). Like many others, I am elated and - right now at any rate - feel strongly that this is a American moment, not a political one.  I am proud of the President, prouder of the Seals, proudest of whoever pulled the trigger.  Already I am bothered to see so many people online and on television and radio unwilling to give even a day over to this wonderful news before seeking to make it all about partisan politics- or worse.
There's More... :: (0 Comments, 126 words in story)

MASSterList: Bin Laden death reactions - Celebrations breaks out at terrorist's demise - Gov in Wis

by: Massterlist

Mon May 02, 2011 at 11:15:41 AM EDT


The news of Osama bin Laden's death at the hands of U.S. forces brought
into the streets in celebration
(WBUR). Lawmakers
have issued statements
lauding the action

With our own labor debate (and union
ire (Globe)
) shifting from the House to the Senate (Sun),
Gov. Deval Patrick attacked Republicans at a speech in collective
bargaining ground zero (PI)

Read the rest of the MASSterList, including the Mitt Monitor, today's legislative headlines, transportation news, new health care headlines, today's Best of the Blogs and more by signing up for daily email at


Discuss :: (0 Comments)

Osama Bin Laden Dead

by: The Angelic One

Sun May 01, 2011 at 23:55:26 PM EDT

The Obama Administration confirmed on Sunday night that Al Qaeda leader & terrorist mastermind Osama bin Laden has been killed in Pakistan by US special forces.

With the death of the Islamofascist responsible for the murder of almost 3,000 Americans committed on 9/11/01, an important phase on the so-called "War On Terror" has been reached.

Details remain sketchy at this point but President Barack Obama will enjoy a surge of popularity over this news. Kudos to our special forces for succeeding in their assignment, kudos to Obama for giving the green-light to have bin Laden killed, & kudos to the source inside Pakistan whose tip-off in August of last year set events in motion which resulted in bin Laden's demise. Allahu akbar!

Discuss :: (33 Comments)
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