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Sunday, May 1, 2016

Ross Rambles: View from an over-30 taxpayer

Thursday, February 3, 2005

A proposal to eliminate state income tax for people under 30 has been getting serious discussion. It strikes me as a sign of desperation.

It is blatantly age discriminatory and could have unintended consequences.

The idea is to keep young people in the state until an age when they have settled down in a career and are less likely to move away.

If this idea is justifiable, what would be wrong with using tax incentives to keep or attract professionals who contribute the most to the economy? A college degree could qualify the person for an exemption from state income tax (unless the degree is in something like French Literature, Mesopotamian History or Journalism).

The more education a person has, the less the person would benefit by an under-30 exemption from state income tax. A medical doctor may be in his or her late 20s after getting a bachelors degree, going through medical school, getting further training in a specialty and serving as a low paid intern.

Once you establish the precedent of a tax break for a select group of people, there will be ongoing debate about what other groups should be given a break because they can't afford to pay the tax, or contribute too much already in local taxes or because, gosh darn it!, they're just really good people.

What we would be left with is a state financed by sin tax. Gamblers, drinkers and smokers would be required to bear the burden of state government because, gosh darn it! they're really rotten people and can only be tolerated if they pay a lot of money for everybody else's public services.

In order for the proposed exemption from state income tax to have any benefit, the person needs an income, which in most cases means having employment.

Young people won't stay in the state or come to the state unless there are jobs for them. The state is committed to establishing programs to promote economic development but not so committed to provide permanent financing for such programs.

A permanent revenue stream for economic development could be established by taxing people who leave their cell phones on in public places, people who have their car stereo bass turned up so much that it vibrates windows a block away and people who don't turn right on red.