and the
Citizens Economic Research Foundation

Barbara's Column
June #4

Weather's improved,
but forecast still bleak for Bay State taxpayers
by Barbara Anderson

The Salem News
Wednesday, June 21, 2006

"Summertime, and the livin' is easy ..."

l  Except for those who still have to deal with the government, which is busy spending the state surplus on pork projects and pay raises that will exacerbate the unfunded pension liability that everyone was deploring last week. Anything to get rid of the extra money instead of rolling back the income tax rate.

l  Taxpayers did win one victory last year when legislators gave in to both a court order and lobbying by Governor Romney, and decided not to enact a retroactive capital gains tax for 2002. This meant that the state has to refund the illegitimate capital gains tax that was paid by some 157,000 people that year.

In order to concede even this accommodation to fiscal sanity, the Legislature required that the overpayers wait four years for their full refund, and they won't get any interest on what is owed them. Even worse, the state is having a hard time finding some of the people who are owed the money and the deadline for applying is next week.

There is no statute of limitation on two things your tax obligation and murder. People get away with murder all the time, but the government will track you to the ends of the earth if you owe it money. However, when it owes you money, it can't find you anywhere!

Or, as my partner, Chip Ford, says, "Somehow, the Department of Revenue finds it easier to chase down those who purchase cartons of cigarettes on the Internet or through Indian reservations than to find and notify those who overpaid an illegitimate tax on capital gains unconstitutionally adopted by the Legislature."

l  Speaking of cigarettes, somehow the government does find the time and energy to run "sting operations" on small businesses. North Shore Tobacco Control sends underage girls to smoke shops to see if they can get inside the door, so the owner can be fined.

No, he doesn't have to sell them anything. The fact that they walk past the "adults only" sign is enough.

I was curious about the difference between "a sting operation" and "illegal entrapment," so I checked and found that in 1992 the U.S. Supreme Court said the government can't launch undercover investigations without first having reasonable suspicion that the target is likely to commit a crime. The harassment of places that sell tobacco sure looks like illegal entrapment to me.

Of course letting a 17-year-old girl who looks older step inside a store should not be a crime in the first place, and I'm sure these scams would be ruled unconstitutional. But what small business owner has the time, energy and resources to fight Big Anti-Tobacco? Easier to give in and pay up; or express one's legitimate outrage by selling the business as Bruce Lerner of Peabody's Main Street Smoke Shop is doing after 19 years of being a responsible part of the Peabody business community.

l  And some wonder why good people are leaving the commonwealth. It's certainly clear why they might want to leave Peabody, which is having a budget crisis while the city government refuses easy money.

Rent control at the city's mobile home parks whose homes aren't really mobile and can sell for six figures costs the city large amounts in unrealized property taxes.

The city assesses only the land, whose value is artificially low because the rents are controlled. The Board of Health also assesses the mobile home park owner $6 a month per unit, which he passes on with a share of the property tax, to his tenants. But the latter don't pay anything near what other tenants and homeowners in Peabody are paying, and the difference is a revenue loss to the city.

If rent control was abolished, or the parks allowed to be sold for development, the new tax revenues would be counted as "new growth' outside of Prop 2's levy limit, and the city would have more money for services. So don't blame Proposition 2!

Instead, politically connected citizens pay less than their share, while Mayor Bonfanti tells people they should call "President Bush, Senator Kerry and Teddy Kennedy, the legislative leadership, and all the city's legislators" for more money.

Granted, of all the above, only President Bush probably doesn't support rent control, but people might better call the Peabody City Council and ask why it chooses to forego property tax revenue from the mobile homes as it cuts budgets.

l  Not that my community's leaders are anything to brag about.

Four of the five Marblehead selectman just refused to reappoint Jack Buba, the one Finance Committee member who speaks up for the taxpayers and resists overrides. The board said it's not the way he votes, it's his attitude.

Years ago, when I was appointed to the FinCom, selectmen deliberately chose outspoken people from all sides of the political spectrum. Having an "attitude" in support of better town government, was considered an asset for an applicant.

Of course those selectmen had "attitude" too and the town was better for it.

Summertime. The "fish are jumpin' and the cotton is high." But it's hard to say, "Hush, little taxpayers, don't you cry."

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.