CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

Barbara's Column
May #1

Tax rollback would restore trust
by Barbara Anderson


The Boston Globe
Thursday, May 5, 2005

ACROSS THE nation, John Kerry supporters are still complaining that some citizens did not get a chance to vote for him because of various electoral anomalies.

In Massachusetts, voters who actually do get to vote on ballot questions are ignored, and their decisions are dismissed. The curious thing is, the same people who assert that "every vote must count" devalue the voting results when it comes to ballot initiatives, as if such disrespect were a virtue. Go figure.

In November 2000, Massachusetts voters elected to roll back the state income tax over three years from 5.75 percent to 5 percent, its traditional rate before the 1989 tax hike. In 2002, the Legislature overrode that rollback vote and "froze" the rate at 5.3 percent, where it remains.

In his proposed state budget, Governor Romney defrosted the rate for 2006, the second half of the coming fiscal year. The House Ways and Means Committee kept the higher rate in its version of the budget. House Republicans tried to amend that document to restore the 5 percent and lost, 135-21.

Instead, House Democrats voted to "study" the impact of a potential rate reduction. Interestingly, there were no votes to study the impact of the amendments to spend the money on pork for legislators to assist in their reelection campaigns. There are rarely attempts to study the long-term impact of other spending programs, either.

But set that criticism aside, and other secondary issues as well: the third-highest per capita state and local tax burden in the nation, the desire of many citizens to have more of their own money to spend on their families and special charities, the effect of lower taxes on the economy. The principal argument for the rollback is that it keeps a promise made by state government: the increase in the income tax rate above 5 percent would be temporary. The 1989 news accounts of the tax hike vote referred to a temporary tax to pay old bills that were creating a budget deficit.

Those statewide news clippings are memorialized on the Citizens for Limited Taxation website. It was clear at the time that no tax increase could pass the Legislature, most of whose members, both Republican and Democrat, were angry with the Dukakis administration's fudging of revenue estimates during his presidential campaign. Voters were angry, too, so legislators were convinced they could vote for the tax hike only if they told their constituents that it wouldn't be permanent.

Once past that barricade, legislators voted for another tax increase the next year, and some of them paid the price in the 1990 election, which propelled Bill Weld with his "no new taxes" pledge into the governor's office. As soon as possible, he eliminated some of the new taxes but was unable to restore the promised 5 percent rate. In 2000, with the help of Governor Paul Cellucci, the voters gave themselves a ballot question and the rollback.

Opponents of this rollback insist that voters didn't know what they were doing. In June 2002, when they froze the rollback, legislators said voters would understand that there was yet another fiscal crisis to address. A few months later, 46 percent of these voters supported a Libertarian ballot question to repeal the state income tax altogether.

This may have been a simple desire to lower the Massachusetts tax burden, but I think it was an angry response to having their 2000 vote ignored. The issue here is false promises, lack of respect for voters, a further deterioration of trust between the government and the governed.

Michael Shermer, a leader in the relatively new arena of evolutionary ethics, argues that the need for trust is built into our genes on their way to creating a viable society and better world. If this is true, our society is devolving. Trust in all of our major institutions has been declining over the past few decades as business executives weave employees' pensions into their own golden parachutes, labor leaders feather their own beds, church hierarchies cover up scandals, and government turns skepticism into cynicism on multiple matters.

Even at the local level, government loses the trust of its constituents every time it threatens disaster while promoting an override of Proposition 2½. Overrides fail and life goes on in Franklin, Scituate, Westwood, Winchester, and Winthrop. Towns that get overrides to make up for lost local aid later get that local aid and put the windfall in free cash. Trust withers.

Before it asks its productive citizens to stay around to help the economy, support 21st-century public safety, and help cope with impending demographic challenges like healthcare and pensions, the Commonwealth of Massachusetts must regain their trust. A good first step would be to restore the income tax rate to 5 percent, as promised 16 years ago.

Barbara Anderson is executive director of Citizens for Limited Taxation.