Saturday, July 18, 1998
Tax cut isn't anything to be
By Barbara Anderson
I know it's summer and maybe you just want to be left
alone. OK, but at least tell me you aren't pathetically grateful that politicians are
offering to let you keep a sample of your own money.
I really can't bear to see taxpayers
sitting up begging like dogs, or worse, lying on their backs with their paws in the air,
grateful for a little attention from their masters. Wag, wag, lick, lick.
The fact is, you're not being offered
much. Not only does the legislature pass a tax cut that is canceled by an increase in the
same tax in the same bill, it generously offers us another tax cut that we could have
passed ourselves on the November ballot. Then it calls this combination the "Biggest
Tax Cut In State History," hereafter referred to as the BTCISH, and waits for us to
wag our tails in gratitude.
First, legislators double the personal
income tax exemption. This is long overdue because, unlike the federal exemption,
the Massachusetts exemption is not adjusted for inflation, and each year it loses value.
Next, legislators cut the 12 percent
rate on savings and investment income to the same rate as wage and salary income. This is
sweet of them, but this ratecut has already been certified as an initiative petition and
we can do it without their help.
The rate on wage income will not be cut
at all. With its refusal even to begin a phase-down from the present 5.95 percent, the
legislature sends a defiant message that it has no intention of ever restoring the 5
percent rate as it promised when the increase was passed in 1989. Wag, wag, lick, lick.
Then we read the part about the tax
The BTCISH lifts the cap on the state
"rainy day" fund, which, when it is full, flows into the tax reduction fund and
is returned to the taxpayer with an increase in the personal exemption. This year we
taxpayers should get about $475 million from this fund -- more than the $423 million we
get from the personal exemption in the BTCISH -- but the tax package keeps that money in
the "rainy day" fund instead, thereby giving us a net reduction this year in our
potential personal exemption.
There are other small, mostly overdue
tax cuts, but because the "rainy day' fund tax increase is more permanent than
anything else in the bill, and the investment rate cut is on the ballot, we rate BTCISH an
It's like someone stealing my cookie,
then offering to give me half back. I want to tell him he can keep the cookie and
hopefully, choke on it; on the other hand, I really would like a taste. Then I find out
that the thief is only returning crumbs.
Since I was hanging around the State
House on the day the tax package was announced, I dropped by gubernatorial candidate Brian
Donnelly's press conference about the state surplus. He said that we should all be better
human beings and give my cookie to the needy. I was glad I hadn't eaten any cookies
lately, or I'd have needed an airplane-style cookie bag.
Later I saw Scott Harshbarger on TV,
offering my cookie to cities and towns. At least Pat McGovern once acknowledged that the
cookie was originally mine, and offered to give it back one small piece a year. Governor
Cellucci tried to get the whole cookie, but settled for crumbs.
Actually, all the Legislative
Republicans, along with the Democrats, voted for the crumbs and the tax increase, with the
exception of Senator Robert Hedlund, R-Weymouth. He, like Treasurer Joe Malone, wants the
state surplus returned to the taxpayers who created it with the extra .95 percent on the
income tax rate.
At least there are two people on Beacon
Hill who don't roll over and play dead when the taxpayers need a watchdog. Meanwhile, the
BTCISH dog do hunt: the surplus stays in the "rainy day" slush fund, the income
tax rollback promise stays broken and taxpayers I suppose are grateful for small tax cuts.
Guess that's just the way the cookie
crumbles. Wag, wag, lick, lick.
Barbara Anderson is co-director of
Citizens for Limited Taxation and Government.