Some readers, as well as
some members of the Massachusetts Senate, weren’t around the State
House a quarter century ago when the income tax rate was
“temporarily” raised above its traditional 5 percent. I was there,
strenuously objecting, and fortunately, taking notes.
Gov. Michael Dukakis had
just returned from his unsuccessful run for president, during which
he bragged about “the Massachusetts Miracle” with its “11 balanced
budgets in a row.” Once his campaign was over and he returned to his
day job, the Miracle had turned into “the Massachusetts Mess” with a
huge budget deficit.
legislators, feeling betrayed by the false revenue numbers they’d
been given during the campaign, joined Republicans in resisting the
tax increase Dukakis wanted. Finally, the Democrats agreed to
“temporarily” raise the income tax rate for 18 months, to buy time
to address budget savings.
The next year they gave up
and hiked the income tax rate again, from 5.75 percent to 6.25
percent. First chance they got, angry voters elected a Republican
governor, Bill Weld. Because he had taken the “no new taxes” pledge,
Weld demanded and got enough reforms to finally balance the state
budget, and managed to get the rate down to 5.95 percent before
leaving the Statehouse.
His lieutenant governor,
Paul Cellucci, joined Citizens for Limited Taxation in a petition
drive to restore the 5 percent rate. In an attempt to waylay this
reduction, Democratic Senate President Tom Birmingham increased the
state income tax personal exemption, from $2,200 to $4,400, with
talk of indexing it to inflation so it would rise every year.
second from right, looks on as then-Gov. Paul Cellucci
signs her tax-cut petition in this September 1999 Salem
News file photo.
Nevertheless, in November
2000, voters passed the income tax rollback, 59 percent to 41
percent, and the income tax rate dropped to 5.3 percent before the
Legislature froze it in 2002, as well as cutting the personal
exemption back to $3,300. Lesson here: You just can’t trust these
Trying to appear as if
they still cared about what voters had ordered, the Legislature
created a formula to slowwwwly lower the rate and increase the
exemption again: the former is presently 5.15 percent and the latter
has returned to $4,400 but never increased for inflation.
The Massachusetts House
has stayed this course, but the Senate voted last week to end the
rollback completely, keeping the income tax rate at 5.15 percent
permanently, using the savings to increase the misnamed Earned
Income Tax Credit, and trying the “increase the personal exemption”
Interesting side item: one
of the senators who argued for this tax hike was Sen. Michael
Rodrigues, who in 2009 was caught by an alert citizen with a camera
buying liquor in tax-free New Hampshire after voting for an increase
in the Massachusetts alcohol tax.
Last week he was quoted by
the State House News Service: “The voters did choose to reduce their
personal income tax liability, but they were given no choice on the
method. We are providing the same amount of tax relief to the voters
of the commonwealth by a different method. It’s not a matter of if
we provide that tax relief, but how we provide that tax relief,”
Cute, senator. The voters
chose to “keep the promise” (the official name of the ballot
campaign) that the income tax rate would return to 5 percent. You
want to substitute a permanent hike in the rate for all hard-working
taxpayers, reduction for only lower-income workers, another
temporary hike in the personal exemption. Why don’t you put it on
the ballot and see if voters like it better?
Let’s keep this simple.
The income tax rate reduction to 5 percent is a quarter-century
overdue; I prefer the bill by state Rep. Marc Lombardo, R-Billerica,
to finish this reduction on July 1, 2015. Also, the personal
exemption should be increased by the rate of inflation.
The Earned Income Tax
Credit was proposed in Gov. Charlie Baker’s budget as a trade-off
with repeal of the film tax credit; a challenge to legislators to
show concern for the poor by foregoing their chance to hobnob with
movie stars. I cringed at the cuteness of this deal, which the
Senate has thrown back in the governor’s face by keeping the hobnob
and letting him care for the poor by breaking his promise not to
If everyone wants to
increase the EITC, fine; this has nothing to do with the income tax
rate that voters ordered reduced in 2000. Find the money somewhere
else, like the millions paid in “questionable benefits” to welfare
recipients, according to a scathing 2014 audit from state Auditor
Suzanne Bump’s office.
Making this all even more
interesting, the House has challenged the Senate for passing a tax
increase by itself. Our state founding fathers set it up so that tax
hikes must originate in “the people’s branch,” not with what were
perceived at the time to be arrogant Senate aristocrats who didn’t
care about middle-class working people. Since little has changed in
that regard, the House has asked the state Supreme Judicial Court to
disallow the Senate tax increase.
Now toss in the statement
by liberal Sen. Benjamin Downing, D-Pittsfield, who said during
debate that the change would help address income inequality by
giving more money to lower-income workers rather than giving some to
wealthier taxpayers who pay the most in taxes, thereby opening the
Senate to the charge that it’s trying to create an unconstitutional
graduated income tax.
broken promises, disrespect for voters: lookin’ senatorially
arrogant, local senators Lovely and McGee.
Barbara Anderson of
Marblehead is president of Citizens for Limited Taxation and a Salem