The governor of Massachusetts, Deval Patrick, is proposing to increase the state's flat-rate income tax to 6.25% from 5.25%, while cutting the state's sales tax to 4.5% from 6.25%, the Boston Globe reports. It seems to net out to a $1.9 billion tax increase on a one-year basis.
I predict that if passed, this plan will be good for New Hampshire and Florida, which have no state income tax. But it's worth thinking about just what the change in incentives would do. It would punish saving, earning (working), and investing more, while encouraging spending and consuming. It's basically the polar opposite of the Yankee virtues of thrift and industry that Massachusetts originally prospered on.