Tax Policy

Casino gambling. This text was published this past Thursday in the
Sudbury Town Crier. By Thomas Hollocher

It is not entirely clear that 3 or 4 casinos in Massachusetts would
be a good idea, and I hope we shall consider the question carefully.
I am concerned, as is MA Representative Dan Bosley. about the
possibility that casinos might diminish Lottery revenue to the state,
which was $952 million last year. According to Bosley, 24% of
Lottery sales goes to the state. On the other hand, he claims that
only 7% of slot machine action is captured by casinos. Because of
outlays for labor, maintenance, and profits, It is unlikely that the
state would get more than 3% of slot machine action. If these figures
are correct, there is a serious potential consequence. For every
dollar that casino gambling might take away from Lottery sales, the
casino would need an offset of $8 gross (24/3 = 8) to keep state
gambling revenues unchanged.
In Bosley's opinion, the loss of Lottery revenue might be
substantial and casino revenues to the state might not offset the
loss. This is based on the idea of fixed discretionary spending and
his expectation of relatively few out-of-state casino patrons.
Then there are the large social and infrastructure costs associated
with casino operations, estimates of which are highly divergent from
different sources. It is not clear, considering the long term and
the state as a whole, whether casinos will have a positive or
negative economic impact. Paul Samuelson, a Nobel Prize economist,
has asserted that gambling is the worst form of economic activity.
Gambling is an industry that produces nothing and fails to invest in
the future or contribute to our material or intellectual well
being. Casinos perform a very strange service by pandering to our
base emotions, our hope of easy wealth and power. Discretionary
money spent on gambling cannot be spent on other things, like
education or home improvements, which add value and generate employment.
Related to casino gambling is the matter of rational taxation. In
my view, the entire tax structure of the state ought to be revamped.
The sales tax is efficient but inequitable; the income tax is not
progressive and contains so many loopholes that favor the wealthy and
business as to be inefficient; and the real estate tax is both
regressive and fantastical in the sense that it makes the assumption,
which has been invalid now for at least 100 years, that value of
property is an accurate measure of wealth or ability to pay. We are
driven in Massachusetts to seek ever more bizarre sources of revenue,
because we fail in equitable taxation.