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The taxpayer strikes back

Posted by Jamie Downey August 14, 2009 10:42 AM

When it comes to state taxes, I often feel like Moby Dick's Captain Ahab and the state of Massachusetts is my white whale. So when the Governor and Legislature recently increased taxes that will soak the average Massachusetts household by some $384 dollars, I became disheartened. The list of tax increases is quite extensive, including the sales tax (25%), alcohol, meals, satellite television, as well as potential increases in local meals and hotel taxes. (BTW – Have you ever noticed that politicians in favor of tax increases now refer to them as “diversifying the revenue base”? In the old days they would refer to them as “closing loopholes”.)

Obviously, $384 dollars is a significant amount of money for any family. In difficult economic times, it can be disastrous. To combat these increases, I am looking for ways to offset my expenditures to the state. The easy solution of buying things online or in New Hampshire to avoid sales tax is not necessarily legal, nor is it supportive of other Massachusetts residents and businesses. While I do not condone this activity, there are certainly many that will pursue this course of action. However, I came up with a few areas that I could at least cut back some of my costs paid to Massachusetts without directly hurting the businesses here in the state. Here they are:

Lottery – While I do not play the lottery very often, I do get suckered in and wager a few dollars when the Mega Millions jackpot gets into astronomical territory, i.e. $70 million. I will no longer participate in this activity. This should save our family in the neighborhood of $50 per year.

Bottle redemption – Now that most every town in the Commonwealth has curbside recycling, is it not time to end the 5 cent deposits on bottles and cans? Since significant numbers of people do not return their bottles and cans, this is a money raising venture for the state. So do not expect its repeal anytime soon. In the past I have been guilty of not returning my cans and bottles for their deposit. (I do recycle them curbside.) However, this process is coming to an end and I am now returning my bottles for the deposit. There is a store up the street with several machines that makes the process pretty easy. I estimate that I will recover another $50 per annum from the state for this little course of action.

Golf – For some reason I play golf a few times a year at Ponkapoag Golf Course. It is a state owned and operated golf course. Like many things run by the state of Massachusetts, it is a complete disaster. It is often referred to as the worst golf course in America. (Which leads to the question, why is the state in the golfing business? Another question, if the government can not run a golf course, how will the federal government ever be able to run healthcare?) Anyway, I grew up near by and spent many youthful summer days hacking around the course and have carried this practice to adulthood. This practice will now stop. No more rounds at Ponky. This will save me from spending some $90 a year to the state.

Dining out in Boston – Mayor Menino has proposed executing the local option tax on meals and hotels. While I do not spend anytime in hotels in the city, I do go in with my wife for meals a few times a year. If the City Council approves this measure, then we will no longer be dining in Boston. I can easily go to neighboring communities that have not executed this option. Savings by executing this course of action will be minimal, but I will feel like I am slaying the white whale.

My strategies only get me back approximately $200 per year of the $384 tax increase to our household, but it’s a start. I am hoping that my obsession meets a different fate than Ahab endured.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

Jill Boynton is co-founder of Cornerstone Financial Planning in Newington, N.H. Along with traditional financial planning services, Boynton provides analysis specifically for divorce.
Andrew Chan is the founder of Integrative Financial Advisors in Framingham. He provides comprehensive financial planning advice and investment management services. He has been an adviser for over 12 years and works with clients to integrate all aspects of their finances including investments, retirement, education funding, and tax planning.
Cheryl Costa is a managing director at AFW Wealth Advisors, which has offices in Natick and Purchase, N.Y. She advises clients on investing, education funding, and estate planning. She holds a master’s in business administration from Boston University.
Jamie Downey has been an accountant for more than 14 years. He's a partner at Downey & Co. in Braintree. Prior to joining the firm, he served as a manager in the audit department of accounting firm KPMG.

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