and the
Citizens Economic Research Foundation

-- Memo to State Senators --
Wednesday, May 21, 2008

Income tax rate:  Let’s get rolling

To:   Members of the Senate
          May 21, 2008
Re:   Income tax rate: Let’s get rolling

In 1989 Governor Dukakis, after running for President of the United States on the "Massachusetts Miracle," returned from the campaign trail to demand the Legislature pass a billion dollar tax increase. Angry legislative Democrats who had been misled about state revenues revolted, and joined with Republicans in refusing to pass the tax hike. In the end, most Democrats gave in, but only after they could assure their even angrier constituents that the income tax rate increase would be "temporary."

After waiting eleven years for this promise to be kept, CLT put a question on the ballot, phasing down the rate from 5.85 percent to its traditional 5 percent over three years. The question passed 59-41 percent. But in 2002, the Legislature “froze” the rate at 5.3 percent with the promise to slowly lower it sometime in the future. That November, voters almost passed Carla Howell’s total repeal of the income tax.

Six years later, the rate is still 5.3 percent, though the formula created in 2002 may drop it to 5.25 this year. It’s a tiny step for taxpayers, who should have been paying at 5 percent since 2003. I figure that the state owes me roughly $500. Since state revenues are $1.2 billion higher than last year, you could take a giant step and surprise everyone by finally keeping that 1989 legislative promise and doing what the voters demanded in 2000.

Perhaps the taxpayers who still haven’t received the “property tax relief” that Governor Patrick promised could use their share of the rollback for property tax relief!

Barbara Anderson --

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