Tax rates are only one among many factors that businesses weigh when deciding where to locate or expand. In Massachusetts, state and local business taxes are lower than in most other states.
A review of employment data for the restaurant industry shows little connection between a state’s tipped minimum wage level and its rate of job growth. High tipped minimum wage levels do not produce slow job growth in the relevant industry.
Some cities and towns have higher concentrations of the labor force employed in low-wage work than others. Raising the minimum wage would tend to have a greater impact in these areas, particularly since workers who receive wage increases are likely to spend a portion of those increases locally.
The FY 2014 budget included new investments in transportation, education, and elsewhere. Part of the funding came from a “tech tax” that has since been repealed. Looking ahead, there are a variety of other ways to fund future investments in our economy and our communities.
Workers across the Commonwealth—and the U.S—still confront a relatively weak labor market, and low-wage workers have been particularly affected by growing inequality and the declining value of the minimum wage.
According to 2011 data recently released by the census bureau, state and local taxes in Massachusetts amount to 10.4% of our total income, which is slightly below the national average of 10.6%.
Law & Public Safety programs help us keep our communities safe and our economy growing. The House budget proposal for FY 2014 would slightly reduce funding for those programs. That includes significant cuts to Indigent Defense and Shannon Grants, but also increases in other areas.
To pay for investments in our people, our communities, and our economic future, Massachusetts relies primarily on tax revenue. And the single largest source of tax revenue in our state is the income tax.