Mass. Gov. Pitches Tax Plan to Business Leaders

(NECN: Alison King, Boston) - Mass. Governor Deval Patrick was making his case Thursday following announcing his plans to raise the state's income tax, but the proposal might a tough sell to lawmakers and business owners.

Governor Patrick says his tax code reform would keep Massachusetts competitive with other states and put the state's tax rates in about the mid-range compared to other states.

The first stop on Governor Patrick's tour promoting his controversial income tax hike was to a friendly crowd of businessmen and women interested in improving transportation and education in the Middlesex 3 Corridor.

"I think the Governor is absolutely right that the private sector has to have a voice and has to carry many of these issues forward in conjunction with the administration because it is the future of the Commonwealth," Bob Buckey, a Middlesex 3 board member, said.

But not all businesses are as welcoming of the Governor's plan that would raise the income tax from 5.25 percent to 6.25 percent, raise corporate taxes all while lowering the sales tax to 4.5 percent.

"So it's very mixed, and I think some businesses are probably going to be pleased by it, others not at all," Michael Widmer of the Mass. Taxpayers Foundation said.

And there are anti-tax groups like Citizens for Limited Taxation which are skeptical of the entire plan.

"He's trying to do a graduated income tax by increasing the personal exemption. Large enough so that the rich have to pay more. You're not allowed to do that," said Barbara Anderson, executive director of Citizens for Limited Taxation.

Anderson says the state's Constitution doesn't allow for a graduated income tax. She says it's been put on the ballot three times and defeated each time.

"He just thinks he can do whatever Obama does and Obama is saying get the rich, so he's going after the rich," Anderson said.

"That's not a bad way to go," Governor Patrick said Thursday. "I mean, I'd like a graduated income tax. It takes longer to do that. We've tried a bit because you have to change the Constitution, but we built in the doubling of personal exemptions to bring that progressivity into our model."

Widmer feels the bigger issue for the majority of the business community is whether the Governor's tax plan is the best one for such a fragile economy.

"I think in the end the question is just does this basic structure hold together with changes of individual pieces of it or does the Legislature start from scratch?" Widmer said.

Governor Patrick concedes his plan is going to take some significant lobbying and promoting on his part, and knows full well he's not going to get everything he wants, but he does say he's convinced that his plan is the right thing for the Commonwealth.

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