Tag Archives: small government

Massachusetts Still Not Getting It

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Hate to pick on the state that saw many great years with our own Larry Legend, but…

The Small Business & Entrepreneurship Council is taking Massachusetts to task for some questionable tax-related decisions as of late. Here’s the skinny:

According to a recent story in the Boston Herald, Governor Deval Patrick wants to do the following:

  • Extend the state’s 5 percent sales tax to alcohol sales in package stores. Bars and restaurants already pay the tax.
  • Extend the 5 percent sales tax to candy sales.
  • Extend the 5 percent sales tax to soda sales.
  • Impose $75 million in new motor vehicles taxes.
  • Increase the meal and hotel taxes by one percentage point.

What will these tax hikes actually accomplish? Consumers will face higher prices, and businesses will face higher costs and lost business. So, in the end, it will be bad news for an economy that’s already badly beaten and bruised.

For good measure, keep in mind that Massachusetts is not exactly sitting pretty in terms of its competitive position with other states.

Big Enough to Take It Away

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The National Center for Policy Analysis recently dissected a Human Events column from Terence P. Jeffrey about America’s need for smaller government. You can read the entire piece here, but here’s the NCPA’s synopsis:

Up until the 1930s, the United States maintained a small federal government that mostly focused on the limited number of things the Constitution authorized it to do.  Americans were responsible for their own food, clothing and shelter, and believed in earning wealth.  What changed?  Well, in the 1930s, we didn’t have a welfare state, says Terence Jeffrey, editor of Human Events.

According to the White House Office of Management and Budget (OMB), in 1930:

  • The federal government spent only 3.4 percent of gross domestic product, federal tax receipts equaled 4.2 percent of GDP and there was a federal budget surplus of 0.8 percent of GDP.

  • By 1940, with the election of Franklin Delano Roosevelt and his modern American welfare state, federal spending was 9.8 percent of GDP, federal tax receipts were 6.8 percent and the Treasury borrowed 3 percent of GDP to make up the difference.

  • The "human resources" part of the federal budget consumed 4.3 percent of GDP; in 2009, it will consume 13 percent. Continue reading →