Rep. Kaufman Talks State Tax Reform

State tax reform was the topic of a special "Open House" forum held last night by Rep. Jay Kaufman at Cary Hall in Lexington. The event marked the 15th anniversary of the policy series, and the 145^th forum Kaufman has hosted since he began his "Open House" series in 1995.

About 30 people attended last night's forum, which addressed the topic: "How do we pay for public service: a taxing challenge." Kaufman's district includes Arlington, Lexington and Woburn, and last night's audience members asked Kaufman a range of questions about the state tax system.

Kaufman said he envisions bringing wholesale change to the state tax system, and he laid out the elements of good tax policy, while hearing feedback on what suggestions people have for fixing the current system.

"My hope is that through these conversations we come up with comprehensive tax reform bill before the next session," he said.

Kaufman, who has served as House chairman for the legislature's Joint Committee on Revenue since being appointed in January 2009, said he believes the right leadership is in place at the state level to bring about change, and that a majority would support tax reform.

"I'm betting that [wholesale change] is the only kind of change we can make, and this is the time to do it," he said.

Kaufman talked about state tax revenues, and the top three sources being property taxes (35.3 percent), income taxes (34.2 percent) and sales tax (13.1 percent), while the state spends the most on health care (31 percent), local aid and education (21 percent) and human services (17 percent).

He said the elements of good tax policy include adequacy, fairness and equity, sustainability, congruency with policy goals, aligning responsibilities and authority, simplicity, administrative and economic efficiency and transparency.

One inefficiency Kaufman spoke about is how "people are buying online instead of on Main Street," and largely not paying state sales tax on their purchases. Change will not come unless states unite to adopt a sales tax system for Internet sales," he said.

"We can't tell a retailer in Colorado, or tell Amazon they have to collect tax for us," Kaufman said. "It has to be done nationally. We're going to have to change our habits."

Kaufman said it is unknown how much revenue casino gambling could bring to the state, but he sees casino gambling following in the footsteps of lottery-ticket sales, where the "lion's share" of lottery revenues come from lower-income communities.

Casino gambling would likely be another area where revenues would largely come out of the pockets of those who can afford it the least, Kaufman said.

"One reason I'm opposed to it, I think it's a tax on the poor," he said.

Kaufman said he hopes lawmakers at the state level can have an "adult conversation" about tax reform, and that he plans to work hard on a bill to make the tax system more efficient and sustainable.

"To do the amount of work I fantasize about is going to be a Herculean effort," he said.

On Sunday, Kaufman is hosting a second June "Open House" at 2 p.m. at the Lexington Depot, which will explore health care reform and the federal and state health care acts. Kaufman will be joined by Richard Frank, deputy assistant secretary of the U.S.Dept. of Health & Human Services.