and the
Citizens Economic Research Foundation
Post Office Box 1147  ●  Marblehead, Massachusetts 01945  ●  (508) 915-3665
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”

44 years as “The Voice of Massachusetts Taxpayers”
and their Institutional Memory

CLT News Release
Wednesday, January 31, 2018

Taxes:  The Dems’ Opioid of Choice

Chip Faulkner, CLT’s communications director, will testify before the Joint Committee on Revenue in favor of the sales tax rollback petition (H.4114) at 2:00 PM in State House Room B-2.

In 1976 the sales tax was increased from 3% to 5%.

During the "Massachusetts Miracle" of the '80s annual revenue growth averaged 13 percent from 1984 to 1987. Then came the high-tech bubble crash. Revenue growth dipped to 4.3 percent in fiscal years '88 and '89. This led to the "temporary, only 18-months" income tax increase.

Twenty-nine years later — a generation — we are still paying that "temporary" income tax hike, though the high-tech industry’s fortunes rebounded robustly.

From 1991 to 2008 state spending grew from $9 billion to $28 billion, more than double the rate of inflation.

Then came the housing boom crash accompanied by "The Great Recession." In 2009 this led to the Legislature hiking the sales tax by 25% — from 5% to 6.25% (over Gov. Deval Patrick's veto) that was projected to raise an additional $900 million a year.

Ten years later — a decade — state spending has grown to $40 billion, the economy has rebounded and expanded, housing prices have recovered and increased in value, state revenue has grown, and we're still paying that increased sales tax.

On Beacon Hill, like legislative salaries and benefits, taxes move only in one direction, defying gravity. The only time that direction is reversed is when the governed have suffered enough and are forced to take direct action through the initiative petition process.

This happened on the 2000 ballot when the “temporary” income tax hike of 1989 was overwhelmingly rejected by the voters. Despite the voters’ mandate, the Legislature “froze” the rollback two years later, in 2002, with its “triggers.” Thirty years after the promise was made and broken over and over, the income tax is expected to drop to 5.05% next year.

The only force behind sane tax policy and limits on government taking and spending is the people, the governed, the taxpayers— when they have suffered enough abuse and are forced to take direct action through the initiative petition process.

This is one of those times and, as always, it is past due.

CLT executive director Chip Ford said: “There is a limit on what taxpayers can afford, and a limit on their patience. The crises that led to tax increases have long ago passed. Lack of revenue is not the problem in Massachusetts. As usual, profligate over-spending is the problem that needs to be contained.”

Citizens for Limited Taxation strongly supports rolling back the sales tax to 5%.

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Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    508-915-3665