and the
Citizens Economic Research Foundation


Barbara's Column
February 2003 #1

Some things to keep in mind
before you agree to pay more in taxes

by Barbara Anderson

The Salem News
Monday, February 3, 2003

Four things to remember during the coming debate on the state budget deficits:

1.)  No matter what the amount of cuts, there will still be a state budget of about $20 billion. Despite predictions of disaster, devastation and destruction, if you cut $400 million, $650 million, or even $3 billion, you will still have money to spend on essential services.

If the budget was downsized to $20 billion, the state would be spending the same amount it was spending a few years ago, when I don't recall civilization coming to a halt.

Which reminds me: "Taxes are what we pay for civilized society" -- this according to Supreme Court Justice Oliver Wendell Holmes Jr. who uttered those words in 1904, before there was an income tax; and when, by some definitions, we had more civilization than we have now.

1a.)  A cut in the rate of increase is not necessarily a "cut," especially in a time of low inflation.

Even a real cut in a particular budget or program does not necessarily translate to a cut in a specific service to a specific person. When Governor Romney fires a press secretary or a lawyer, it is a real cut; but it doesn't mean some poor child is left without a meal.

2.)  According to the latest report from the Washington-based Tax Foundation, Massachusetts' tax burden per capita is the 5th highest in the nation.

Whatever caused the current fiscal crisis, it was not a lack of taxation here.

2a.)  Legislative leaders often call for a "blended approach" to dealing with the fiscal crisis; by this they mean some cuts, some reform, and lots of tax hikes.

It seems to me that our 5th-highest burden means that we taxpayers have been providing our share of the ingredients all along. Last year we were given the biggest tax increase in our history. Time for new ingredients.

Tax hike proponents will point out that the Massachusetts tax burden, relative to personal income, is 23rd in the nation. If you are looking at a budget deficit, it doesn't matter how much money the Massachusetts wealthy make; what matters is how much in actual dollars is taken and spent.

Spending per capita is a better number. It is harder to find, but generally tracks the taxing per capita.

Using per capita data is the only way to compare a 6-million population state like Massachusetts with New Jersey or North Dakota.

If we tax and spend roughly 5th in the nation, and 45 other states tax and spend less for all the men, women and children within their boundaries, then we can draw a general conclusion that we could survive some spending cuts. The fact that the millionaires who live here can afford to pay more has nothing to do with the discussion, or with little ol' me!

In a similar assessment, it is important to compute education spending per student, since what counts is how many kids are in the Massachusetts school system requiring service. This number has generally placed us in the top 10 among the states as well.

3.)  It is not, under any circumstances, the job of the taxpayers to suggest budget cuts before they can resist being taxed more.

We taxpayers provide the money that provides all state services; we've done our job. Someone say "Thank you!" instead of suggesting we leave our jobs and our families to become state budget analysts and auditors. That's what we pay our representatives, administration officials, and state auditor to do.

4.)  Medicaid is the giant in the parlor of all state budgeting.

Governor Romney is right to ask Medicaid patients to contribute something, but cheating by middle-class clients is understandable until the Legislature repeals the tax on self-pay nursing home clients. It's one thing to take responsibility for oneself, and another to be taken advantage of by being forced to contribute to the patient in the next bed.

Even with reform, the demographically-increased costs of the Medicaid program means that there is no longer room for "business as usual" in Massachusetts. It's time to get state spending under control.

Governor Romney made a good start with his television address. He must continue to heed the words of Rudyard Kipling and keep his head, even when all about him begin losing theirs and blaming it on him.

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

For another view on "The Draft" and "mandatory national service," see Chip Ford's column, "'The Draft' is a misguided program in a free society," published by The Boston Sunday Herald on June 28, 1992.

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