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Mass. Legislature finds itself in hole, keeps digging

Last week, I discussed how Massachusetts is hemorrhaging people. The plains and simple truth is that there are many, many reasons why the state is nicknamed "Taxachusetts," reasons such as income taxes, sales taxes, property taxes, water taxes, auto excise taxes, inheritance taxes... well you get the idea. Officials have been trying to woo new businesses into coming to Massachusetts, encouraging existing employers to expand, and in general trying to reverse the trend of folks getting the hell out of Dodge.

So, what's the latest brainstorm to sweep through the legislature? More benefits to workers, in the form of the nation's most generous paid family leave program.

According to the Boston Globe, employees dealing with childbirth, adoption, or caring for a sick family member could get up to 12 weeks of paid leave, up to $750/week. The Glob says this would be funded by a new payroll tax, of at least $1.50 per week -- and if the Globe says that is the minimum, you can be damned sure it'll actually start at double that, and go north from there.

So any employers who are thinking of hiring folks in Massachusetts, here's yet another tax you get to pay, another set of forms to fill out, and another factor to take into consideration: will this employee up and vanish for three months on my dime, and will I get stuck paying for both them and their replacement? How much time will it take for that replacement to get up to speed? And what will I do with their replacement once they return?

There's an old saying -- "when you find yourself in a hole, the first thing to do is stop digging." In Massachusetts, it seems, the first thing to do is get a bigger shovel.

Massachusetts legislators are among the most compassionate people on earth -- and it's no wonder. Anyone can be remarkably generous and understanding when they get to stick other people with the bill -- and those who end up footing the bill never get mad enough to vote the swine out of office. (My apologies to pigs everywhere.)


Comments (10)

Hmmm.Does this new... (Below threshold)
ed:

Hmmm.

Does this new rule include employees of these politicians? Quite a few of these touchy-feely type laws are written so they don't actually apply to the offices and workers for politicians.

Like the federal smoking ban in public buildings. It doesn't apply to members of Congress.

Kind of reminds me of the "... (Below threshold)
Rick:

Kind of reminds me of the "big dig". If the hole isn't big enough, get more money and make it bigger.

Hmmmm.Well look at... (Below threshold)
ed:

Hmmmm.

Well look at it this way. At least it's not the fighter jet programs in India or China.

Funny enough both India and China have been independently working on a domestically designed and manufactured fighter jet for the better part of 25 years.

In China's case it's a version of the Mig-21. In India's case it's a .... version of the Mig-21. And in both cases, which are completely separate aircraft btw, each country has spent tens of billions of dollars on developing these aircraft.

The whacky thing is that, even if they succeed, they'll have spent all that time and money developing aircraft that was obsolete 20 years ago.

It's nice to know that not only the American government is completely insane.

I'm glad Japan is an ally. ... (Below threshold)
john s:

I'm glad Japan is an ally. They would have developed a perfect clone of a Mig 21 in 18 months. 18 months later they would have improved it to be better than anything we can build here. And they'd sell it in the U.S. for $5 million a copy. Not a $1 billion each or whatever that later advanced fighter boondongle will eventually cost.

The problem with emigrating... (Below threshold)
cubanbob:

The problem with emigrating mass-holes and their counterparts from California, New York, Illinois and New Jersey is that they soil the political landscape of where ever they go to. They vote for the same type of progressive (commie)garbage that ruined the states they left from. Stay where you are and leave decent folk alone.

Let's remember folks that b... (Below threshold)

Let's remember folks that because of a unique provision of the Internal Revenue Code, state legislators pay between zero and little federal income tax -- but this employee payroll deduction would apply to them -- if they don't find a way to exempt themselves, that is.

I've mentioned it before bu... (Below threshold)
Faith+1:

I've mentioned it before but the tax situation in Mass. is the specific reason we closed our Waltham branch of our company and moved it to Virginia. BTW, Virginia thanks Mass for its donation of 240 jobs to our state eceonmy. Please, keep it coming!

Apologizing to pigs in this... (Below threshold)
Lee:

Apologizing to pigs in this post shows you really know your audience JayTea.

Let the libs pay for their ... (Below threshold)
mak44:

Let the libs pay for their own sins and stay in taxechussetts, lets annex it and call fraudenstein!

higher taxes higher ,higher^

Regarding Senate President ... (Below threshold)

Regarding Senate President Robert Travaglini's Paid Family Leave Proposal....

Having spent well over a year developing risk, cost, and use models for a commercial Family Leave insurance product, I would like to point out a couple of major flaws in Senate President Robert Travaglini's plan to grant up to 12 weeks of paid family leave at full salary, capped at $750-a-week--one is "moral hazard" and the other is "adverse selection". These flaws will cause costs to employees to escalate, or be shared by employers and/or tax payers, due to certain and rapid program insolvency.

First, insurance policies typically employ waiting periods, deductibles, and co-pays to prevent the over-use of insurance policies by causing the insured to participate in the risk and cost of an incident. By providing benefits from the very first day of family leave, and by providing full pay, the employee considering leave, and then taking leave has no financial incentive to prevent or mitigate the cause of leave; nor does the employee have an incentive to return to work as soon as possible. The lack of participation by the insured in preventing or mitigating the incident or causes of incidents is called "moral hazard".

Second, if a paid family leave benefit of 100% of pay with no waiting period is adopted, those workers who most need the benefit will want to move to Massachusetts for work simply to get the benefit. While it is possible Massachusetts wants an influx of new workers, if workers take jobs for the purpose of taking paid family leave, those jobs will be less available for workers with standard risks of taking family leave. This practice--selecting a job just to get the benefit--is called "adverse selection". I am not judging here, merely stating facts.

Without measures and tools to prevent both moral hazard and adverse selection, an insurance company would either go bankrupt, or have to charge so much for the policy as to make it unaffordable for the policy holder. This is precisely what will happen to a state mandated paid family leave fund that pays 100% of salary from day-one of family leave.

The answer to this problem is not to ignore the need for paid family leave, but to implement fiscally sound solutions that workers and employers both can afford--and solutions that benefit both workers and their employers. By proposing an unworkable plan, Senate President Robert Travaglini is hurting, not helping, the case for paid family leaves. Businesses and taxpayers are justifiably wary of Travaglini's plan--let's hope his plan has not made them wary of all solutions to the real need for financially assisted family leave.




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