Massachusetts Puts More Eggs In Its Non-Profit Basket
Massachusetts State Legislature has produced a veto-proof majority to increase the state’s sales tax from 5% to 7% to help meet the projected deficit in the state budget.
The pros and cons of tax hikes versus deficit spending versus budget cuts are well established, as are the pros and cons of increasing the sales tax specifically, and I don’t think the immorality of legislators wringing more money out of citizens while leaving themselves and their vassals untouched has passed anyone by.
The point I would like to make is that the tax increase further tilts the competitive advantage of the state’s economy in favor of tax-exempt non-profit organizations, most prominently colleges and hospitals, but also, and importantly, the slew of advocacy and activists organizations that overwhelmingly support expanding government spending and often receive money from the government to produce services of various kinds.
The bet Massachusetts is making is that the for-profit sector will create enough new jobs that are well -paid enough to support government and non-profit jobs even as the plane is increasingly tilted in favor of the latter.
