• Analysis excerpted from Boston.com (and edited to clean up some very sloppy writing in the original)Yesterday, with significant fanfare and reporters present, Governor Patrick signed into law a stimulus bill for the New Hampshire Retailers Association and e-commerce Web sites.
By increasing the Massachusetts sales tax by 25%, both Mr. Patrick and the legislature have enacted the equivalent of the Northern Massachusetts Uncompetitive Act. This ensures that those retail vacancies, that are already abundant, will continue to rise (consequently local real estate rolls and real estate tax revenues will decline).
Fortunately, New Hampshire retailers and Amazon.com will continue to thrive under this legislation. Unfortunate as it is for Massachusetts retailers, consumers will search out these lower taxed havens. No need to send jobs to China when we can send them right over the border to New Hampshire.
Let’s look at some of the tax increases and other highlights of the bill ... :
Sales tax on alcohol: Alcohol purchased from liquor stores has historically not been subject to the sales tax, as the state already imposes a hefty excise tax on these purchases. For instance, a 1.75 liter of distilled spirits already has approximately $2 of state excise tax.
A $25 purchase of spirits will now increase the states take on the sale by a whopping 78%, to $3.56. The state now is charging sales tax on the $2 of excise tax that they already charge.
In the eyes of Mr. Patrick and the legislature, double taxation is twice as good as single taxation. This increase will generate $79 million of additional taxes to the state and cost the average family some $30 annually. We can only guess the cost to the local liquor store owners and their employees. ...
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