Is $10 billion enough?

The Globe reports on a proposal by state officials to spend an extra $10 billion over the next decade to keep our roads and public-transit systems from collapsing. Naturally, we're talking new taxes to pay for it all.

Read the plan yourself.

Neighborhoods: 

Topics: 

Free tagging: 

Comments

Of course not but it will be

Of course not but it will be enough for Deval to justify all types fare raise's, fees, and new taxes. Deval says nothing is of the table, that is except the real estate tax decreases he promised.

From the perspective as a

From the perspective as a citizen with the perspective of the first real job making an actual decent paycheck, I'm not particularly enjoying seeing how much of my gross amount and then how much of that is subtracted. So I can't say seeing a raise of income tax that would make my paycheck smaller or an increase sales tax that make everything cost more as particularly enticing.

That said, I been looking and playing with the budget to see what's been going on. The discussion so far has been a call for a rise in either income tax or sales tax in the name of funding for transportation. Considering the number of discussions about GLX, bike lanes, Big Dig tunnels, MBTA system failures, MBTA budget crisis, and Silver Line, I think it is reasonable that the infrastructure aspect of government is very prominent in this corner of the internet. And new development in this area would be a visible sign of the revenue being put to good use.

Yet, I have to look at the idea of taxes even for transportation with skepticism. I remember reading quite a number of commentary that the sales tax itself was temporary. And they just raised it back in 2009. Somehow MA got by without sales tax revenue then got by at 5% and now at 6.25%, and yet every dollar taxed is now essential and any reversal means serious consequences.

In other words, this implies that new revenue likely becomes the new normal. We can't consider the idea of new taxes as raising funds for infrastructure without viewing as a permanent rise in either cost or decrease in our paychecks with eventual same service we see now.

Thus assuming the new and permanent increase, this mean the best case scenario is a visible change to infrastructure to our eyes. Such as seeing a slew of backlog projects that is now possible including the end of foot-dragging for GLX, new shiny stuff like actual new OL cars, end of MBTA Budget crisis talk, highways with decent lights, a number of new shining bridges and the bunch of other stuff outlined in the link or projects not noted (like Blue line to Lynn/Salem). Then it will somehow become the new normal with money barely able enough to cover the transportation system.

The worse case scenario is after raising the tax is we see nothing. Only a few bridges will get fixed. GLX will move kicking and scream if at all. The MBTA budget crisis will remain. Yet to go down means grievous cuts in services whereas services was able to provide that level with the old tax rates.

Thus, it leads me to two thoughts. First, since we need to raise money to pay for such projects (which is very visible to us too). I wonder how much we can cut budget from other departments to transfer to transportation. Possibly after the completion of such projects, re-divert funding back to the departments as needed. Obviously this is too naive and simple, but I still believe the essence have a point.

The second is if we have tax to raise funds. Then let it be the gas tax. It was shot down recently, but try it again with knowledge that shooting it down again means a new income tax or sale tax increase. While I know some here don't like the gas tax, one cannot deny that a gas tax will go away by itself in time with no effort from the government or us. The gas tax can raise the 10 billion for needed projects then inflation will end the revenue before it somehow become part of the new normal. Other taxes will not go away without conscious effort by some group. If the needs remains after inflation kills of the revenue, it would means the state have to talk about more taxes all over again. But I much rather have another tax discussion 10 years down then just accept a percentage raise with no discussion 10 years down or worse... another need for raises even though the percentage remains the same.

But alas, such a long post that the ones who matters are the people on the hill.

Gas tax is on the table

Check the document again.

Also, we weren't able to "provide that level [of services] with the old tax rates."

The whole point of this discussion and plan is that we've been holding things together with duct tape for too long, the forward funding legislation didn't work (its projections were wrong), the highway dept is borrowing to cover its operating costs (unsustainable), and everything is falling apart.

Mileage checked every year at inspection

Per mile tax, anyone? Regionally weight it to the actual costs of building and maintaining the infrastructure.

Certainly would shut up the "if you use public transit you should pay for it" and "why should I pay for their public transit in Boston" folks right quick.

I know gas on the document is

I know gas on the document is on the table, Matthew. While the release of the report includes a raise in the gas tax as a possible option, there was a number of news reports and articles discussing how to raise it. Like this article:

http://www.masslive.com/politics/index.ssf/2013/01...

There are others (I don't know how much people take stock of masslive) though it seem to been updated or buried from the report.

The important quote remains this from quoted from Patick himself:

"I tried a gas tax a couple of years ago, remember? It fell with a great thud. I am not certain that a gas tax is going to do for us what needs to be done but we will see what is proposed in the transportation finance report. There are going to be a number of options in that report and that may be one."

So while the reports includes a gas tax as an option. Patrick is leaning away from considering it as an option versus income or sales. From his quotes, he specifically says income.

The whole point of this discussion and plan is that we've been holding things together with duct tape for too long, the forward funding legislation didn't work (its projections were wrong), the highway dept is borrowing to cover its operating costs (unsustainable), and everything is falling apart.

The line you quoted from me is from the "worse case scenario" paragraph. You misunderstood my sentence. If we go the new tax rates, the current rates will be the old one. The worse case scenario is we pay more but nothing get changed (still hold together by duct tape with a possible breaking point) while going back down to current levels now means massive cuts and damages.

----

So again, between what to pick. I would say the best ones are flat fee type rather than any percentage type taxes: Gas tax, tolls, and fees. If the real needs goes down, inflation will ensure revenue will not create the scenario of finding new ways to make things above actual needs become the new minimal base. If real needs is above, it would prompt another discussion for more revenues, and I think that's a good thing. There should be a debate every so-so number of years (just not every year) over what is really needed and to put funds for the need.

$1.8 Billion* for South Coast Rail $0 for Red/Blue Connector

* Realistically, $2 billion.

Those 4,790 or so projected daily riders on the commuter rail extension must be the most special of special voters to win such favor. The State House has latched onto the idea of giving them a rail line and will not let it go until this niche clique has its needs addressed.

To the many, many more who would benefit from having the congestion at Government Center and Park St. relieved - there is not even the slightest bit of concern.

Two depressed urban areas,

Two depressed urban areas, New Bedford and Fall River, see a rail link to Boston as their future salvation. The voter support for it in those two communities is far larger than the actual number of people who will use it.

Transit Projects

The Red-Blue Connector is needed, although realistically for the amount of money it would take to continue the Blue Line from Bowdoin to Charles they might want to just put in an underground concourse with a moving sidewalk sort of thing (like at the airport).

As far as South Coast rail, the number of people who would initially use it might be low, but it's kind of a case of "if you build it they will come (in their pants)." Initially it will be some subset of people down there who are fed up with driving up route 24 to their jobs in Boston, but in time it would help spur some activity in the area and increase ridership (at least that's the theory). But we need to think about it not in terms of suburbs to the city commutes but regional transport. People in Fall River taking the train to jobs in New Bedford; connections from commuter rail stations via improved RTA service to other town centers off the commuter rail lines, etc. In time these investments will help generate a lot more economic activity and enhance quality of life for people who either cannot or choose not to drive.

But in the end this is all a bit of theater as after the State of the Commonwealth speech and the Gov's budget next week, all eyes turn to the Legislature for their proposals. What MassDOT laid out was how much $$ was needed and an a la carte menu of revenue (tax) options. Nobody likes paying taxes. Typically they also don't care much for bridge collapses and habitually stalled trains. Make up your mind.

Naming right will NOT

equal $10B/year. What about making Bikers pay their fair share. Seeing as the City of Boston is investing heavily in biking, maybe we can make them pay up to. Every bike should be registered, this will also make ticketing Bikers enforceable.

I'd love to hear your answer

I'd love to hear your answer since I seem to be missing something. How do bicyclists pay their share? Are they paying mileage tax or something? Or, are you just thinking of the taxes we all pay. I believe bikes should be registered with a fee involved as well since roads are for everyone, everyone shares the burden.

All those bike lanes take up space that cars have had for the past, I don't know how many decades? I'm not demeaning bicyclists, but they do need to pay as well, maybe in lieu of gas tax some kind of other fee.
Now excuse me while I put on my flame suit!

First, it $1B/Year. The $10B

First, it $1B/Year. The $10B is over 10 years.

Second, I'm pretty sure Will is just joking and not really making a serious statement of naming rights for any real revenue.

Third, it is arguable that bikers are paying via sales tax. Most of the improvements for bikes are some paint on the roads. Meanwhile bikes are too light to really do any damage to the roads and sidewalks to cause additional maintenance loads. Thus sales tax revenues from bikes and accessories is covering it.

Finally, I do not agree to the idea of registering bikes. Ticketing can be enforced by the actual person. Most people with police staring down at their face is not going to hide their ID cards.

Ok anon

How exactly are we going to pay for the added levels of bureaucracy that would be required to manage the registration of (rough estimate) thousands of bikes in this city?

Aside from that, we do pay our fair share, through various taxes that we pay and don't forget that there are bikers that also own cars who pay taxes. Same goes for property owners who drive and/or ride a bike.

If there were only bikes and

If there were only bikes and no cars, the cost of road maintenance would drop to near zero because bikes don't weigh anything - you'd pretty much only have to account for weather and time-based upkeep.

Cyclists pretty much already do pay their fair share by not polluting the air/worsening climate change.

to tape

We all benefit from having roads and highways, even cyclists who don't own cars. Okay, so you don't own a car. Whoop-dee-doo. You've never been a passenger in a car, truck or bus that has driven on roads and highways? I find that highly unlikely. Even some of the most die-hard bike advocates who comment on this site also own cars and mini-vans and they from time to time drive on roads which we ALL benefit from.
Amazing that you manufactured that bike all by yourself from found objects that magically appeared at your fingertips. How do you think the food you buy at the grocery store gets to your local grocery store? Duh. You've never needed to take the bus to get to work or school? Sorry to burst your bubble, but some of us do. When it snows out, Your parents never commuted to work? Awesome! how do you think the roads you bike on get plowed? Newsflash a truck with a plow attached to the front. You nor anyone in your family has ever called an ambulance? You're very lucky. Don't have nor plan on having kids that you need to shuttle to soccer games, field hockey practice, doctor's appointments, daycare, etc.? Okay, though you do realize that plenty of people do have families, right? Are you opposed to children? Do you expect 2 year olds to hop on their plastic Big Wheels and zip on over to daycare? Listen, next time you bum a ride from your car-owning buddy to get that Ikea hipster coffee table, try not to be such a smug holier-than-thou jackass for not owning a car.

It's a Jump to Conclusions Mat

You sure did jump to a lot of conclusions there, "anon". Particularly the one about me being a "smug holier-than-thou jackass for not owning a car."

I own both a car and a bicycle, for whatever that is worth. Probably nothing to you, given your impressively unhinged rant.

of course

of course its easy to point fingers at the Democrats. I think its equally across both parties. Both line up that public troth when its feeding time. Its just whoever is to blame is only spending money on something the other party doesn't like.

Republicans

Were in charge of the Big Dig.

Problem is, we have a lot of aging roadway and drivers don't want to pay their share to maintain it.

The problem is drivers have

The problem is drivers have been paying their share. Sales Tax, Gas Tax, Excise Tax, and all kinds of fees to put a car on the road. Also, those that pay surcharges on their insurance.

Look, I understand the need for costly repairs as our roads are in pretty bad shape. What I don't get is why we have Toll takers making more than social workers, why we have tolls at all on the pike, and I'm not that confident that this administration has looked at other money saving options. Has government tried to control spending? To this taxpayer it doesn't seem it, at all.

At speed tolling

Actually a few weeks ago Patrick had said something about further consolidating the transportation department, and of changing over to at speed tolling on the pike.

The turnpike authority and toll collectors really are something that needs to go the way of the dodo, as last report I saw only 10 million off 200 collected was going back into state coffers. It’s a patronage employment organization, and it hurts the MA economy by artificially throttling transportation while not really taking in much revenue.

At speed tolling (you get an electronic fast pass, or they take a picture of your plate and send you a bill plus an administration and billing fee) is something they have in Texas, and hell if it isn’t a smart idea. No booths to back up traffic, no hassles if you forget your transponder, and it’s cheaper to administer.

More people can and will use the road, while it will also reduce traffic congestion caused by the tolls.

Let do it here in MA

I’d also like to see tolls go up on 93/91 at the border. I do realize our NH brethren pay income taxes, but they’re skating by on everything else, including when they fill up in NH and bypass our gas tax that goes towards the roads they’re using. We can keep it reasonable, but we should do something about it as long as NH keeps tolls up on 95 at the MA border. Tick for tack, no?

Drivers Don't Pay Their Share

Study after study demonstrates this - drivers are HEAVILY subsidized by the cost of building and maintaining and servicing roadways.

Especially drivers in places where the road length per person is relatively high.

Just because you pay a gas tax or a toll DOES NOT MEAN THAT YOU ARE PAYING YOUR FAIR SHARE.

Gas tax in MA is piddlingly low given the costs.

Get a clue, please.

Let's just clarify

Drivers AND bicyclists pay income and sales taxes, and those, in addition to federal monies from income taxes pay for a significant portion of road construction and upkeep costs. Not to mention that a lot of bicyclists own and occasionally drive cars, just fewer miles than others.

Gas taxes and vehicle taxes, two taxes which specifically target drivers only, make up 55% of road costs, with another 5% coming from 5%.
http://www.transalt.org/files/newsroom/magazine/03...

Society has made a choice to subsidize automobile travel, which is fine, we just need to be conscious of the fact that car- specific taxes do not pay for nearly all of the costs of car infrastructure.
And lets not even get into the externalized costs of damage to the environment.

Nice

The argument of a narcissistic man child. I’m sure you never had any help making your way bootstrap bill, lest of all used the roads, bridges, and economic transportation throughways of this state. Knowing this sort of Dreck argument, I bet you commute down from NH to work, pissing on MA all the way.

Let’s not forget the mess we’re in now is because of forward funding that didn’t materialize and several Republican Governors who gave back minuscule tax cuts for positive political capital, derived from areas of the state that we wouldn’t see their adverse effects until they were long gone (and apparently running the worst modern presidential campaign in history). That said, Patrick wasn’t too eager to fix the problem off the bat either, and is complicit in the degrading of those institutions. He partially restored education funding, but infrastructure and transportation were thrown the bone.

Transportation and Education were deeply cut, and we were told they were doing fine. Now the bills are coming due, and it’s going to cost us a hell of a lot more than the maintenance costs would have originally.

You don’t skip all your tune ups and oil changes on your new car to put a few bucks in your pocket. Eventually, quite soon, the engine will seize and now you need to buy a new car outright. Residents of the Commonwealth that allowed politicians to play that game with our infrastructure and school have only themselves to blame.

But that $100-250 a year refund was so worth it, right?

The funny thing is that when

The funny thing is that when Republicans are in power, they want (and take) even more of that money than Democrats do when they're in power.

But by all means, keep wrapping yourself in the calm, warming blanket of Fox News.

Can't Deval and the

Can't Deval and the legislature cut some of the rampant waste, fraud, and abuse of public funds before putting their hands on our wallets? Or are they still too busy dreaming of casino revenue and building larger personal fiefdoms to care about the economic consequences of confiscating more wealth from the peasants?

We need transportation infrastructure to be maintained, but there is so much lard which should be axed and the funds reallocated, before passing around the collection plate.

Ok

So, Specifics?

Everyone likes to talk about waste, pork, lard ect; but then can;t name exactly where they want the money from.

And lets be realistic here. "dozens of purchases of booze" out of 2 million EBT transaction isn't going to re-built a bridge. Nor is paying the legislators $0.

They're fun to gripe about, but the numebrs don't add up.

Oh but the numbers do add up

Even if you hate the rich, it's getting ridiculous. Think about the following:

One spouse is a doctor - makes say $300k and in my opinion has earned every penny of it. Now the other spouse wants to go to work:

Income tax 35%
FICA 7.65% (double if they are self-employed)
State income tax 5.66% (under the proposed rules)

That's 48% minimum, 52% if you happen to use the remainder to buy something and include the sales tax 59% if you are self employed and about 65% if you happen to live in a place like NYC or CA which have even higher confiscatory tax rates. At some point, why get out of bed in the morning if you work a whole year, but only get paid for August to December?

For many successful wealthy couples, this is not at all far fetched. There is almost no marginal value in the second spouse working. And that doesn't include property taxes which I assume to come from the first spouse. Allocate that 50/50 and you could be easily be talking a 70% rate depending on the variables.

As for Mass - the state budget is already about $5000 per person or $15,000 per household (I think 30% higher when you include various transfer programs that aren't in the general fund).

Government at every level has simply become too big a part of the economy and if we don't fix it fast it'll be like snow on the roof and will cave in on top of us.

The governor and Davey talked about a lot of things we "want". Well in my business you advise people to pay for the things they "need" and you only get wants when there's some left over. If there's nothing left over, you get nothing. Sorry folks, there's nothing left over - so you get nothing! As my twitter handle says - imnotapiggybank! If they "need" an extra billion dollars - cut it from somewhere else. We elected them to make those sensible decisions.

Golf clap

Stirring speech, Stevil. Reagan's corpse just jizzed in his grave.

But you avoid the point.

"Everyone likes to talk about waste, pork, lard ect; but then can;t name exactly where they want the money from."

Name something specific you want cut. Otherwise it's just posturing.

3%? Seriously?

That's a serious question socko? We are talking 3% of the budget. You don't even have to "cut" anything.

Simply eliminating COL increases for 2 years probably pays for all or most of this. Less generous retirement benefits probably takes care of the rest if needed. This is not a criticism of state employees or compensation. It's a recognition that there's only 100% of the pie to go around and if you keep jacking up taxes you kill the goose laying the golden eggs.

Remember government accounting means if you don't implement a planned increase that counts as a cut in their world, so if you planned for 3% growth next year tell everyone that budgets are flat and the 3% extra revenue goes toward this needed DOT spending. Deal with it - you can give everyone a raise and have fewer employees or the same number of employees making the same amount of money.

My specialty is more Boston's budget - but remember a couple of years ago when Armageddon was upon us and we had to cut city employees? Well, since then we've had one year of a flat budget with about 3-4% increases since and we've cut 6% of the employees.

Has anybody noticed? I'm sure the same would happen at the state level. This is an easy fix unless you take the easy road out. You can't keep picking empty pockets.

Sorry

But I'm not too concerned over a family comfortably making $300,000 a year having to decide if one partner wants to work or stay home. That’s a luxury position, and the choice is there. The sky is the limit to make more money if they so choose. In fact, if you’re in that position, your choices are endless as to what you want to do. If you can’t make enough to make it worth it, well, that’s the free market. There’s plenty of people working two jobs who can’t make it either, so I really don’t get the complaint besides “woe is it to be rich”.

And, you can always file individually. You’ll of course lose a hell of a lot of the deductions that being married allots that couple, and probably not make it worth it, but there’s always the option. Unless you meaning having your cake and eating it too.

Back to the topic at hand, federally and in this state spending on transporation as a percentage of GDP is way down. We aren’t spending more, we have been spending less.

I do agree the trend lines are not substanible, but if you want to fix the defict the two biggest drivers are healthcare and defense spending. In MA it’s healthcare, education, and infrastructure. Thing is with both education and infrastructure, they give a bigger ROI via the multipier effect and attracting bussinesses to the state. Healthcare is the biggest problem facing this country at the moment. Fix the costs of healthcare, and you will go a long way to fixing both the federal and state budget.

You should be...

...worried about those families making $300k. If they choose to move elsewhere we are Mississippi. With the way we spend money if even a small percent of them moved we are toast.

Transport as a percent of GDP may be way down, but total government spending as a percent of the economy is at historic wartime highs (which were very acute - these spending levels are chronic).

Pick your poison. You can't have your cake and eat it too. As I said elsewhere - I'm not arguing with most of the proposals (although I think the South Coast rail line is a red herring). I'm just saying pay for them by cutting something else (or even just freezing spending which gets you there in 1-3 years).

You Funny

Mississippi has PLENTY of rich people.

The problem is that these rich people PAY VERY LITTLE IN TAXES.

You WANT Massachusetts to turn into Mississippi with your "grand ideas".

Just go Galt, please!

You know fuck-all about Mississippi.

Mississippi is where we are heading if we let the $300k+ earners skip town after earning their money off our backs.

Mississippi is about fiefdoms that pop up, exploit the locals, and then move off once they've used up the resources or found a better deal to pursue. Always has been.

Deregulation levels the playing field by making everyone play to the least common denominator. The only reason Mississippi sees success these days is because it was already at the bottom of the barrel.

Mississippi is also

heavily subsidized by Massachusetts federal tax dollars. Their low taxes are not some product of a vacuum, they're "leeching" of us in the Commonwealth.

If you want to look at it that way.

Me, I know economics and national success isn't a zero sum game. I also think this bottom of the barrel, super greed capitalism is actually hurting our potential.

You think would be the state it is currently without MA, ME, VT, and CT? We're a regional economy, and we need each other. What MA does, allows our neighbor to the north to try something different. We have income taxes and relatively low property taxes, NH does not and has high property taxes. NH taxes business revenue, MA only taxes profits.

Your numbers don't come close to adding up.

Let me begin by saying you have no idea what you're talking about. You can argue against raising taxes, but bring facts to the table instead of the nonsense you're spewing.

A married couple making $300,000 in wages likely has an AGI around $280,000 after $20k in deductions for mortgage interest, real estate taxes, etc. Plus exemptions for spouse and self. The tax rate you cited is wrong - it's 33%, not 35%. But that's not how we tax income. We have tax brackets - so your money is taxed at different rates all the way up.

Here's how it breaks down:

Wages: $300,000
Deductions: (20,000)
Exemptions: (7,600)
AGI: $272,400

Federal Taxes: $66,798
Social Security: 6,826
Medicare: 4,350
MA Tax @ proposed rate: 15,848

Total Taxes: $93,822

That's an effective income tax rate of 31%. Add in $10,000 for property taxes (a huge amount, but still) and it brings it up to 35%. If they spent every penny they had left on taxable goods that brings them up to a 39% effective tax rate.

So, in closing, it's not a 48-52% tax rate. It's not a 59% rate if you are self-employed. I'm not sure where you got 70% from, but it's certainly not that.

It scares me that you fancy yourself such a tax guy that you tweet about it on a regular basis lacking a fundamental understanding of how taxation works.

I wasn't being that specific

You are correct - it's 33% at that income level - not 35%.

Note - I am talking MARGINAL tax on the additional working spouse. Get back to me when you figure that one out. And if you can't figure out where I get the additional 7% marginal taxes on the second spouse if self-employed, you are no tax guy.

However, you forget (and I ignored) the additional 0.9% medicare tax this couple now pays (or double that if self employed I assume- couldn't find a quick anser to that) - so I'm off by about 1% or zero (up to a point at which a 35% rate or even a 39.6% rate kicks in). If you assume the worst case situation the marginal tax rate including SSI and HI on a self-employed spouse could exceed 60% on income in Mass plus an additional 3% consumption tax on the remaining $0.40 if that dollar is spent - maybe 4% if spent in a restaurant in certain towns.

This is a complicated issue and depends on all kinds of assumptions. The point is, tax rates on a second working spouse in a high income household are at or exceed confiscatory rates and the main point that government has grown to be far too large a portion of the economy remains.

Don't get me wrong - I like many if not most of the proposals. I just think they should be paid for through spending less elsewhere.

Now you're just making a fool of yourself.

Stop. Please. "I wasn't being that specific" means you were making up BS to prove a point.

The .09 medicare rate is only for over $200k so that brings up the marginal rate to 34%.

Marginal rate for the additional working spouse making $70,000 is 46%. Overall marginal rate together is 38.5ish%.

So you're still wrong.

Should have changed the headline

eventually went in a different direction with my post.

I'm not an accountant, and never claim to be, I'm pretty good with taht piece, but I typically deal with what's left after s/he's done - so tell me what number is incorrect (marginal on taxable income over $300k)

33% tax rate
0.9% additional medicare (times 2 if self employed)
6.2% SSI (times 2 if self employed)
1.45% HI (times 2 if self employed)
5.66% State income - proposed rate
We almost agree there - 47.2% or 55.8% if self employed.

Increase above a certain level and you hit 57.8% and you can max out at 62.4%. If you purchase something taxable with what remains of that dollar that's another 3% for a total of almost 2/3 of your marginal income goes to the government (assuming you don't count property taxes, fees, licensing and god knows what else).

End of the day, after 50%, the precision matters less than the point. Tax rates on the wealthy have become confiscatory. And government, as a portion of the economy, is grossly out of control. You keep piling on and the wealthy figure out a way around it - move, don't work, find some tax shelter, avoid or evade taxes etc.

Oh and if you didn't notice - go check Boston.com - now he wants ANOTHER $1 billion to fund education funded by... wait for it... MORE NEW TAXES.

I was serious when I said stop.

You're just adding taxes together and think you're coming up with the effective rate. That's not how it works.

Some of the money will be taxed at 10%, some at 15%, some at 25%, some at 28%, some at 33%. That's how the brackets work.

Then there's Medicare tax on all of the income at 2.9%.

Then there's an additional .09% Medicare tax ONLY on the amount over $200,000.

Then there's Social Security tax of 6.2% ONLY on the first $106,000.

Then there's the proposed 5.66% tax.

Effective v. marginal and joint v. individual

Yes - but if one spouse is already earning $300k taxable - then the household is taxed at the marginal rate thereafter - you've already exhausted the lower brackets. The second salary doesn't get to reuse them. However, the SSI has to be paid on each salary up to the max ($106k - thought for 2013 the number was bumped to about $110k). However the new medicare tax is also cumulative to the household I believe - so it's .9% for each additional dollar over the limit ($250k for a married couple - not $200k). One thing I'm not sure about is whether that .9% has to be paid by the employer as well if your salary exceeds $250k - based on this discussion and the fact I believe it's measured in AGI it appears it can only be assessed on the taxpayer because it's on household income so I don't think there's a way for the employer to track/match it - something new to the payroll tax system.

Again - however you calculate it and assuming you consider payroll taxes truly taxes (that's actually debatable as it is actually a government mandated insurance program) you get to a number well over 50%.

Considering I openly admit this is not my specific area of expertise, I think I did a pretty good job. In your case I sure hope you aren't processing tax returns for people or the lot of you will be spending a disproportionate amount of time in a windowless room in Andover.

In some ways you are right

A lot of what I posted here isn't common sense - it's arithmetic. The rest - like don't spend money you don't have and don't beat the strongest members of your society into submission would qualify as common sense outside this site.

No, you just read it that way

One spouse is a doctor - makes say $300k and in my opinion has earned every penny of it. Now the other spouse wants to go to work:

The operative word is now as in "from this point forward" or "different from before". I don't see anything in my comment that reflects any reference to effective tax rate.

And the 1% pay even less

Nicely put, but the real question is why is a multi-millionaire like Romney paying 15% when a nice upper-middle class couple is paying 31%?

In general I believe that the 30ish percent of the income that my husband and I probably pay in terms of services either directly received (roads, health and safety regs, education) or services I'm damn glad we haven't had to receive (fire and police services, social services) is a fair trade off.

However it's unconscionable to me that those who make obscene amounts of money pay such reduced percentages of their income.

A poor mindset

This makes me think of "tax freedom day". As if you're going to work each day to pacify The Man until you can get out from under him every year and finally earn a nickel yourself.

What hogwash.

Tell you what. If you feel that way, then the military can stand down on "tax freedom day" for the rest of the year. And the police can take the rest of the year off. And the firemen can take the rest of the year off. And the teachers. And the construction workers that keep the roads in what apparently passes for "good shape" up here.

After all, you've finished doing your part, surely they're done with theirs.

Or perhaps you can recognize that maybe you get back more than you put in when it comes to your taxes and that maybe it's a good investment for all of us, and the only reason they're taken "via gunpoint" is because of all the kooks out there that think they have all the answers and that nobody's ever helped them do anything in life. You know, the folks that ejected themselves from their own mothers rather than simply "being born".

Anyway, to your example - common complaint seems to be that it'll somehow no longer be considered worthwhile for people to work because they have everything they need. I guess you just dismiss out-of-hand that mankind likes in general to feel productive and advance society at-large. I may eventually retire, but I have a hard time believing I will ever stop working. I'm not overly concerned about the money. As long as I can live comfortably, that's all I really care about. I like to feel productive and helpful, and if my needs are already taken care of, then it doesn't really matter what I make.

A pity more people don't have that perspective on life. It's all ME ME ME.

Stevil, do me a favor

Show me in actual dollar amounts a graph of what a couple making $25,000 before taxes up to $600,000 before taxes (above that and there's probably more to do with capital gains, etc. than simply amazing salaries for both individuals) gets to take home.

Put their gross earned amounts on the X-axis and their net after taxes ($ amount, not percentage) as you think it exists on the Y-axis. If the curve doesn't maintain a positive slope the entire graph, then we'll talk.

Even better

Sure it's always a positive number - but there comes a point where the marginal satisfaction/utility of a fraction of a dollar earned working isn't worth the effort of working.

Here are two examples:

Your wife is an accomplished doctor. You have been raising the kids, but you want to go back to work. You can make about $50k, but thanks to your wife's salary, your marginal rate (federal, payroll and state) is 50% so you net $25k. Then you get out an envelope and on the back you calculate the following: commuting expenses $3000, childcare after school/school vacation etc. for 2 kids - $10k (low??), lunch and dry cleaning $2000, summer camp/daycare $6000, Retirement savings $4k.

Take home for a whole year of work - $0

Scene 2

You can make $110k per year. Using the same calculations above you get:

Gross $110k
Net $55k
Same work costs/expenses $25,000.

Take home = $30k

Given the requirements - personal, stress etc. of a $110k job if you only get to keep $30k and I have a feeling in both scenarios I am underestimating child care costs, you have to wonder if it's worth it.

Sure it's better than a sharp stick in the eye - but it's not a whole lot of financial motivation to work and this is someone smart and productive enough to generate $110k per year whom we have essentially incented to withdraw from the workplace.

If you get over that $110k rate it gets a little better as you don't have to pay additional SSI (for now), but realistically you probably have to get back into the upper 6 figures before it starts to make much financial sense to reenter the workforce.

This is not a tax problem

Wow, Stevil. I never took you for a fan of Elizabeth Warren. You've done well conveying a bit of the argument of her excellent book.

The Two-Income Trap

A fellow I know very well gave up a six figure job to stay at home with the kids. It wasn't because TAXES WAAH LIBERALS. It was because, as you and Warren show, the marginal contribution of a second income to family financial security is less than one might think, whereas the contribution to children's emotional and intellectual development of having a stay-at-home parent is greater than commonly believed. And, yes, you did underestimate child care costs: a two-career family keeping a single child in day care can pay 30-40K a year just for that.

The failure of your argument, however, is that the problem cannot be solved by jiggery-pokery with marginal income tax rates. Sliding that one factor up or down by a few percent does not change the reality that, for upper middle class parents, one career is better than two.

Kaz also alludes to a more fundamental rebuttal of your argument: this is a very nice problem to have.

Well good PR can sell just

Well good PR can sell just about anything, including higher taxes and fees on a public that is sick and tired. Has government even tried to control waste, or not bother because it wouldn't make a difference anyways?

To list a few things: 19k

To list a few things:

19k people on the rolls which the state can't confirm even live here is a big start. Verifying residency and eligibility for state benefits and tax refunds is a big deal and not taken seriously enough.

Gutting all the assistants, secretaries, directors, etc. of non existent departments and positions throughout state government would also be a big step.

Drop the ridiculous travel allowances and state owned cars for representatives.

All state and local employees could be sharing the same pension and healthcare benefit pool to reduce overhead.

Why isn't MassPort part of MassDOT?

We have many redundant state agencies which could be consolidated much like MassDOT and DCR has been.

The state is giving out money to interests out of state and paying for out of state trips and offices for public officials. This is beyond what state level government should be doing and we shouldn't be paying for it.

I'm sure everyone can think of at least one thing state government is paying for which it shouldn't be. Add that together and there would be plenty of money for the stuff that everyone can agree on.

Use FACTS

eligibility for state benefits and tax refunds is a big deal and not taken seriously enough.

Eligibility for state tax refunds? That's not an actual issue.

Gutting all the assistants, secretaries, directors, etc. of non existent departments and positions throughout state government would also be a big step.

Name 1.

Drop the ridiculous travel allowances and state owned cars for representatives.

Drop the per diem for state reps? I agree. That'll save less than $500k. No such thing as a state car for a Rep.

500k is nothing to sneeze at,

500k is nothing to sneeze at, especially in the position we find ourselves. Nothing should be off the table before asking the taxpayers to pay up. If we had more faith in our government, I don't think asking us all to pitch in would be such a stretch. The problem is, I don't think the general public has much faith in the way the state spends our money.

indeed

but that type of spending is usually used to argue for not paying taxes.

It also fails to explain that the MA budget is around 1.4 billion, and we have a annual GDP of around 350 billion.

Math matters.

Look at Florida who implemented a drug screening program for welfare recipients that cost the state more money than it made in finding drug users to kick off the rolls.

But hey, someone got to feel all righteous.

Why was so much $ spent on transportation projects

including the T, that didn't add any real capacity? 50 billion to put that elevated stretch of the artery downtown underground...yes, it was a beautification project that's resulted in a strip of parkland that almost nobody uses because it's stuck between two heavily trafficked streets, and one extra traffic lane in the underground highway. 50 billion dollars.

The MBTA:

Why was the blue line built and then just ended at Bowdoin and Wonderland? Why was the greenline stopped at Lechmere instead of extended as a transit line into East Cambridge and Somerville? If you get on a greenline train today most the trains end at Government Center! Never mind the fact many people go on to North Station and Lechmere [I go on to N. Station so often must wait to go a few more stops], and they can't even manage to get that right. I guess they assume 95% of the tourist are getting off at Government Center so F it. Why hasn't the orange line made it's logically extension to Hyde Park/Readville, West Roxbury, etc., with room to run express trains? It's the reason why F.Hills and Washington St. is such a clusterF and 'kids' hang out causing trouble. I understand why this wasn't done in the past, but the past is long gone. It's silly that a major transit line just ends at F. Hills and was never extended as population and neighborhoods grew. People in H.P., Roslindale, W. Roxbury might also be able to stop paying $176. a month or more for commuter rail zone 1 and 2 passes and settle on a simple 70 buck combo pass like everyone else in the city limits. The streets are also too crowded for all the buses. Why hasn't the Fairmont Line been turned into a regular transit line to service the heart of the city? Boston's transit lines look like they simply stopped logically expanding 75-50 years ago, and every transit project since then has been about making things look prettier, more 'green' or complaint with the federal disabilities act.

And there's a simple disconnect and lack of logical coordination between the independent municipalities within Greater Boston, even within the inner urban area like Boston, Brookline, Cambridge, Somerville, Malden, Revere, Everett, Chelsea, Quincy, etc., If this were almost anywhere else, they would have been combined into one big city [like Toronto and Montreal did a decade or so ago up in Canada, like Houston down in Texas has done a million times]. Do people realize how geographically small the City of Boston is compared to comparable cities? Baltimore is over 60 sq miles in land area, Washington DC almost 60, Atlanta [which has a much smaller population vs Boston, 430,000 vs 625,000] is 130 sq miles in land area, Louisville,KY, Memphis,TN both well over 100 sq miles in land area, the list is endless...and Boston stopped at 48 sq miles in land area, Hyde Park being the last surrounding town incorporated into the city. Seattle is like 90 sq miles in land area, roughly twice the size geographically of Boston. Imagine All of Boston, Brighon/Allston, H.P., Roslindale, West Roxbury, J.P., Dorchester,Roxbury,S. Boston, south end, North end, Back Bay, Charlestown, etc., being twice the size geographically as it is now, with the same population...you just imagined Seattle. Only S.F. is comparable to Boston or vice-versa as far as big cities go in America, in fact San Francisco is slightly smaller geographically than Boston.

Our road system is a clusterF, and should have been logically modernized and extended where necessary to add capacity, not just to beautify things and comply with this or that federal 'green' legislation [then of course the federal funding would have evaporated, I understand].

Our transit system is a clusterF primarily, IMO, because it stopped logically expanding [minus commuter rail] and add more capacity to deal with increased demand as the population of metro Boston grew and grows. All transit projects seem to be about solely complying with the federal disabilities act [literally millions of $ so maybe a few dozen people can use a transit station more comfortably] or essentially beautification projects. No money to actually expand and add capacity to the system, especially the core. Now compare the MBTA to the D.C. Metro...that's a system that's designed for a modern late 20th-21st century city. We're stuck with a early to mid 20th century designed system.

And our roads aren't much better. And the $ cost of really improving and God forbid expanding is prohibitive primarily because of all the red tape and regulations at both federal and state level. I understand engineers, accountants, lawyers and unions make big $ off the status quo. I understand 'advocates' for this or that get their brownie points and pad their resume every time a 'green' project or 'disabilities' project gets built. I understand the typical politician is owned by these various special interest groups. But the average citizen gets screwed, per usual.

Quick reaction to transport issue- a step in the right direction

I haven't had time to look through the proposal yet, and we will know more after the Governor talks tomorrow, but my quick reaction based on what I heard this a.m. on 'BUR:

I think the "everyone is going to pay more" approach is the right one both morally and politically. Transporation infrastructure is a core governmental function (private entities cannot build it - they might be able to operate it, but there is no way that they could acquire the necessary rights of way, etc.) and as such, I am happy to spend a significant amount of tax revenue on it (but less happy to do so on things that are not core gov't functions).

The blended approach for enhanced revenue is the right one - there is no reason to soak a particular group disproportionally (e.g., triple the gas tax, triple T fares, etc.).

The earmarking for particular projects is the wrong approach and Stephanie Pollock of the Dukakis Center was right when she talked about better planning. That said, not diverting the money from transportation, again, a core governmental function, is a good idea.

The Commonwealth-wide approach is also the right one both morally and politically (we need buy-in from everyone, and that means outside of greater Boston, too).

Projects to make quick meaningful improvements must be put to the front fo the queue so that people can see results quickly and start to be assured that this is not just another tax/fee hike to pay for salaries and pensions.

The details are going to be a bear, but let's see what the Gov has to say tomorrow night.

"New MBTA Red and Orange Line

"New MBTA Red and Orange Line Cars ($1.5 billion)...Green Line Cars ($732 million) – The cars will be made in Massachusetts, supporting the local economy."

Uh oh. Didn't the T learn their lesson from the Hyundai-Rotem commuter rail coach debacle? When companies have to reinvent the wheel and tool a factory from scratch, it's no surprise when it leads to huge delays and cost overruns.

Yet instead of buying off-the-shelf rail cars from trusted manufacturing plants, the T is going to insist that someone build a brand new railcar factory in Massachusetts?

"the T is going to insist

"the T is going to insist that someone build a brand new rail-car factory in Massachusetts?"

Some politician's family knows a guy that is a friend of some other connected lady that once met another guy that owns a factory which once considered building rail-cars. So in other words, a fully vetted and competent factory has been found after an exhaustive nation wide search and will only be 10 years and 500% over budget in delivering the orders. Within a year the vehicles will explode and suck some toddler down a black hole leading to an invasion by demonic turkeys which will enslave Brookline and only be thwarted from state wide domination by an army of cranberry farmers with highly illegal 'high powered military grade' muskets.

AdamG will of course have the scoop on all of this well before any of the lazy media does.