and the
Citizens Economic Research Foundation


Barbara's Column
March 2002 #3

Top ten reasons not to roll back the tax rollback
by Barbara Anderson

The Salem Evening News
Monday, March 18, 2002

The law passed by the voters in November 2000 rolled back the income tax rate over three years so it will return to a flat 5 percent in 2003.

As we must apparently debate that income tax rollback again, it's hard to know whether we're debating a hike in next year's income tax rate to 5.3 percent (sometimes referred to as "the freeze"), 5.6 percent (last year's rate), 5.85 percent (Tom Birmingham's preferred rate) or 5.95 percent (the Massachusetts Mayors Association's preferred rate).

For the sake of simplicity, not to mention respect for the voters, we'll just oppose all rates higher than 5 percent.

Herewith the top ten reasons to keep the rollback rolling:

1.) We can't trust politicians who tell us the higher rate is "temporary" because what the Legislature called a "temporary tax" when it was passed is now 13 years old. It took an initiative petition to make legislators keep the promise that the rate would drop as soon as the 1989 fiscal crisis was over. (See item 6).

2.) The voters passed the rollback by a 59-41-percent margin, with 91 percent of the commonwealth's cities and towns voting yes. What part of "yes" don't some legislators understand?

3.) The state budget has doubled since the temporary tax was enacted, partly because when the deficit bonds it funded were paid off, the tax stayed and encouraged roughly a billion dollars a year in higher spending. Local aid increased dramatically; many communities, while spending as if there were no tomorrow, also accumulated "free cash" that they can use to offset a local aid slowdown.

4.) A tax hike is a pay cut. Taxpayers can spend their share to stimulate the economy, save it for their families and their future, or give it to a charity, rather than trust the legislature to spend it wisely. Because ...

5.) Legislative priorities include allowing generous pensions for forty-somethings, other patronage abuses, impulsive new programs in response to crisis journalism, corporate welfare, and their own pay raises and benefits. The Legislature, in general, does not like it when the voters tell it what to do, and will use any excuse not to do it.

6.) If the Legislature gets away with killing yet another voter initiative, the initiative petition process is dead. There is no reason to spend your weekends getting signatures, and support a ballot campaign, if politicians just insist that you didn't know what you were doing when you voted, then repeal your hard-won law.

7.) The terrible budget cuts we hear about are cuts in the accustomed rate of growth. For areas of real need, there is a $1.5 billion rainy day fund and other state savings accounts, made up of taxpayer dollars that were held during the good years to cover essential services in an economic downturn.

8. To address Medicaid increases, the new $8 billion dollar "taxpayer reimbursement" from tobacco companies can be used for any required increases in health care spending. If state spending is not brought under control this year, the state will not be able to deal with a real fiscal crisis caused by increased Medicaid costs or anything else, when it arrives.

9.) This is the only chance to get state spending under control before state revenues pick up and the next big spending period begins, leading to more tax hikes in the next recession.

10.) Legislators should pass the Citizens for Limited Taxation voluntary tax before hiking taxes on all of us. Who knows how much money could be raised by putting a line on the state income tax form for Senator Birmingham, the mayors, and other volunteers to pay the old, higher rates themselves? 

Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem Evening News and the Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in other newspapers.

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