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The Boston Globe



The tech tax squeeze

Law is confusing, and threatens to undermine state economy

If those who cannot remember the past are condemned to repeat it, then a number of legislators should be looking over their shoulders, wondering whether their time in office is near an end. That’s what happened in 1990, when the state expanded the sales tax to cover all manner of services — from lawyering to dog-walking — and voters erupted in anger, ousting Democratic incumbents and propelling a Republican to the governorship. The same may happen in 2014.

Free-spending politicians are revenue-hungry, constantly seeking new and uncomplaining sources of revenue. And so one can imagine the chortles of delight that must have greeted the idea of extending the sales tax to cover computer services. After all, tech was doing well — rapidly growing and highly profitable. Surely they wouldn’t mind a paltry 6.25 percent. Even better, the industry had a reputation for being politically naive. The mistake of 1990, the argument would have gone, was in going after lawyers. Law firms are key funders for political campaigns; soaking them for more proved a problem. Techies, on the other hand, are generally disengaged from politics. Heck, many of them don’t even have real offices. They might squawk, but they could be safely ignored.

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