On August 1, 2009, Massachusetts increased its sales tax from 5 percent to 6.25 percent to address a severe budget deficit. United for a Fair Economy believes that raising the sales tax was clearly preferable to slashing the budgets of vital public services. However, UFE is disappointed that the Massachusetts Legislature did not raise revenue through progressive sources such as the capital gains tax, the state estate tax, or the personal income tax.
The sales tax is the state’s most regressive major tax, meaning that low- and middle-income people pay a much higher percentage of their income towards it than wealthy people do. The overall Massachusetts tax system was regressive prior to the increase in the sales tax. Rather than raising needed revenue AND making the tax system more fair and progressive, the Massachusetts Legislature just made that system more burdensome for low and middle income families.