Massachusetts tax scholarships as income

Apr 22, 2013 by

Massachusetts Gov. Deval Patrick wants a state income tax increase that would raise the rate from 5.25 to 6.25 percent.


But his proposals also include eliminating deductions on a number of personal expenses. Among those deductions Patrick wants to eliminate are deductions for any income derived from college scholarships.

Patrick says he’s closing loopholes and that his tax plan, offset by a proposed reduction in the state sales tax, will raise $1.3 billion annually.


Weymouth Republican state Sen. Bob Hedlund says the governor is making a mistake by trying to tax scholarships.


“He’s been saying since he was elected that he wants to promote education, but in an effort to avoid cutting any spending, he’s planning to tax the very thing that helps people get an education,” Hedlund said.


Hedlund adds that he doesn’t believe the governor’s budget will make it out of the legislature because Democratic House Speaker Robert DeLeo has proposed his own budget.


Greater Boston Tea Party Coordinator Christine Moribito believes that while Hedlund says the governor’s budget may be dead, that doesn’t mean the specific proposals are.


She adds that in Massachusetts, tax proposals seem to live on, no matter how misguided.


“Yes, that’s true (that the scholarship tax isn’t dead). All of the proposed tax increases are ridiculous. We don’t need to raise taxes on anything,” Moribito said.


“We need to be concerned about the debt we’re leaving for the next generation not passing on increased tax burdens,” Moribito said.


Political analyst, columnist, and radio talk show host Jeffrey Kuhner says that Patrick’s proposal to tax scholarships is anti-growth and an assault on Americans.


“Frankly, I don’t think we should tax anything. We’re overtaxed. We should be cutting taxes to grow the economy,” Kuhner said. “The state government has more than enough money if they would go after the waste, fraud, and abuse.”


Massachusetts’ fiscal conservatives are railing against the governor and the legislature’s tax proposals, but they’re doing it without the help of Massachusetts’ social conservatives.


Many Massachusetts social conservatives believe they’re being shut out by the Greater Boston Tea Party, a movement that some social activists believe is trying to completely avoid the moral issues.


Massachusetts Family Association President Kris Mineau agrees and says the Greater Boston Tea Party is making a major tactical blunder.


“I think the Tea Party movement is making a big mistake in totally avoiding the social issues, especially those upholding the traditional values of life and marriage,” Mineau said.


Mineau says it’s perfectly acceptable to use the money issues as leverage to garner more participation. He adds that the budgetary woes have their roots in the ethical principles.

“We agree that the rallying points are about the national debt and the largess of government, but both issues have strong root causes related to life and marriage,” Mineau said.


Mineau gives some examples.


“Since Roe v Wade 40 years ago, there are 55 million fewer citizens in America. That means 55 million fewer taxpayers to support Medicare and Social Security, never mind the productive and creative geniuses we’ve lost,” Mineau said.


“The nuclear family, a married father, mother and children, is the best department of health, education and welfare, not the government. Married couples earn more money and enjoy better health than do singles over a lifetime,” Mineau said.


“A child raised in a home with a married father and mother does markedly better in all measurements of health, academic achievement and social behavior, and carries those strengths into adulthood,” Mineau said.


“Conversely, dysfunctional, unmarried or divorced households costs American taxpayers $113 billion annually due to welfare, substance abuse and crime. Massachusetts spends almost $1 billion annually,” Mineau said.

via Show me the money, says governor.

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