CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

Barbara's Column
August #2

Thanks for sales tax holiday,
now let's have that income tax rollback
© by Barbara Anderson


The Salem News
Thursday, August 11, 2005

Such a fuss about the president of the United States going to Texas for five weeks. What point is there in hanging around Washington, D.C.? They don't have a telephone at the ranch?

Those of us who telecommute should relate to his 21st century workplace, with computers and fax machines and probably, for a president, all kinds of secret communication devices. Even for us, much as we'd like to have the summer off like children and teachers, there is always something going on.

Tax issues are always with us. This coming weekend is a sales tax holiday. For two days, we can shop for items that cost up to $2,500 without paying the 5 percent Massachusetts sales tax. I've been keeping a list of anything taxable I need to buy and will get it all on Saturday. Unless there's a long line.

Pardon me as a taxpayer activist if I'm not jumping up and down for joy. Maybe I'd be more grateful if the commonwealth were to pay me what it owes me since it stopped the rollback of the state income tax rate to 5 percent.

To those who say the difference between 5.3 percent and 5 percent is insignificant, I have two words: Rhode Island.

Our neighboring state, at the urging of Fidelity Management, just lowered its income tax on bonus income to 4.95 percent, hoping to lure high-earning money managers and executives as residents. After all, 4.95 percent of something is better than the highest graduated rate applied to nothing. It's also better than our 5.3 percent. As Fidelity expands to states with better tax policies, one has to ask oneself: Why does it need to be here at all? Why does anyone?

I just received a letter from a former Massachusetts taxpayer who got fed up and moved to New Hampshire, which doesn't have a sales tax holiday because it doesn't have a sales tax. He wrote that he recently purchased a new car and the amount he didn't pay in sales tax "buys a lot of gas."

He notes that others who are planning for retirement are taking their paychecks and pensions over the border or to Florida and Nevada — states that have no income tax. Of course, he does have to pay high real estate taxes on his renovated cottage, but overall he says he is much better off without the aggravation of so many "public sector scams," — patronage jobs and pensions, police details.

There is no legislative will to do anything about the long-standing Massachusetts political culture, though. When the loss of productive citizens and jobs becomes obvious, bills are drafted for specific tax credits to help businesses live with that culture, the high per capita tax burden and unemployment insurance costs — though one bill does address unemployment insurance fraud.

This year, the tax credit emphasis is on biotech, though there seems to be more legislative enthusiasm around giving breaks to film companies. When Asia replaces us as the technology leader of the world, we can say we saw Tom Cruise walking on Boston Common.

There is also no legislative will to give the technology industry what it really needs, which is an education system that emphasizes science, math and technology and sets teacher pay by the law of supply and demand: math and science teachers more, English teachers less.

I just paid the August real estate tax bill, with past overrides and debt exclusions attached. Voters are saying "no" more often, though. I wonder: Now that the Catholic Church is being told by some communities to pay property taxes on the churches it is closing, is it still opposed to Proposition 2½? If it thinks the real estate bill in Danvers is bad now, try doubling it — because that's where the taxes would be if the voters had listened to the church and rejected Prop 2½ 25 years ago.

Of course, it's always the top of the hierarchy that is the problem: individual Catholics voted as they pleased. I remember one priest in a North Shore community giving the blessing for a luncheon at which I was the guest speaker; he ended with "And God bless Proposition 2½."

Thank you, father.

In case anyone is wondering, when I and other taxpayer activists talk about voting for overrides or debt exclusions "for the children," we are not serious; we are making fun of the excuse used by the teachers unions for why their members need another pay raise.

What the children really need is a lesson about living within a budget — and classrooms taught by professionals who get paid what they can negotiate for themselves based on the subject they are teaching and general merit. The latter subject has just come up in Springfield, but the teachers union is opposed. But, but, what about the children?

Mr. President, I know you are entertaining heads of state at your Texas ranch this month, but could I just camp in a quiet corner? But first, of course, I have to go shopping here this weekend.


Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence Journal and other newspapers.