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Gov. Deval Patrick outlined a sweeping proposal to restructure the state's tax system Wednesday, asking the Legislature to raise the state's income tax while also calling for a decrease in the state sales tax.
There was little surprise that Patrick would be proposing new revenues in his State of the Commonwealth address. Over the past few days, he's been outlining bold initiatives in the areas of education and transportation at a price tag of an extra $1.9 billion a year.
In making his pitch to lawmakers for extra revenues, he said opportunity requires growth and growth requires investment.
"It’s just as true of government as in any business. The economy is not like the weather; it is not some natural force that is beyond our control, something where we have to wait for others to predict or explain," Patrick said. "What we choose to do, and not to do, shapes our future."
To pay for the initiatives in education the governor is calling for the state's income tax, now at 5.25 percent, to go up a full percentage point to 6.25 percent.
"To make that increase fair to all according to their ability to pay, I will propose that we double the personal exemptions for every taxpayer and eliminate a number of itemized deductions," he said. "Making those changes gives us a tax code that is simpler and fairer."
But while proposing the state's income tax go up, the governor is also recommending the state sales tax, now at 6.25 percent, be lowered to 4.5 percent, with all money raised from the sales tax to be dedicated to a public works fund.
"That fund will support the transportation plan I have laid out — both our existing responsibilities and the necessary expansion projects — as well as the school building fund and other public infrastructure," Patrick said. "Under my plan, sales tax proceeds would be off limits for any other purpose."
The governor maintains that with these changes Massachusetts taxes will remain comparable and competitive with other states in the region. He acknowledges there will be debate, and he encourages it.
"Every one of us here has to think twice before asking people who already feel strapped to contribute a little more," Patrick said. "But this time, instead of sinking into the same old slogans, let’s have a serious, fact-based debate."
Outside the House chamber moments after the governor wrapped up his speech, House Republican leader Brad Jones was critical of the proposal. He says more savings can be made before raising taxes.
"There are still buckets of reforms that can be done and undertaken. And to the governor's credit and to the Legislature's credit, we've undertaken some of those, but more needs to be done," Jones said.
In past years, Democratic leaders, such as House Speaker Robert DeLeo, have also been reluctant to consider tax increases. But this year, things might be different.
"We have to take a look at it. I mean this is a major proposal that the governor put forward to us today," DeLeo said. "And I think it's only fair we give the members the opportunity to talk about it, as the governor had stated, debate it, then we'll have an answer."
DeLeo's counterpart, Senate President Therese Murray, agreed lawmakers need to look deeper into the proposal, but indicated they might give the governor some of what he wants.
"The governor's definitely gone long on this," Murray said. "And you know, I applaud him for that. But the devil's in the details and we're going to have to take a look and see what is in there."
Lawmakers will get a better idea exactly what is in Patrick's proposal next week, when the governor releases his detailed budget proposal.
This post was updated with Morning Edition feature content.
This article was originally published on January 16, 2013.
This program aired on January 16, 2013.
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