and the
Citizens Economic Research Foundation

Barbara's Column
February #2

Thank grandchildren, not Washington,
for that tax rebate
by Barbara Anderson

The Salem News
Wednesday, February 12, 2008

Well, the "economic stimulus bill" didn't add all the goodies some politicians wanted, like expanded unemployment benefits and food stamps that would indicate a lack of confidence in actual economic stimulus. It just gives most taxpayers a rebate on their income tax, while tossing in Social Security recipients, disabled veterans and some low-income households that don't pay income taxes in the first place.

Don't get me wrong. I am thrilled with my coming $600 tax rebate and will soon be doing some comparison shopping for a new kitchen floor. Anytime the government lets me have some of my own money, I'm willing to spend it.

However, I'm not going to be grateful. I won't be writing my U.S. senators and congressman thank-you notes, and I won't be voting for any of them anyhow. I hope other voters feel the same way; but having heard people express gratitude for their annual income-tax refunds, I'm not sure everyone gets the point, which is:

* The government takes part of our income from our paychecks, before we even see them, and unless we carefully select our withholding amount, it has to return some of it to us after we send in our tax returns the next year. And we don't get interest on the float.

* The government spends the money on some good things, some bad things, and some totally foolish things. Then it spends some more, building up the annual deficit that becomes the ongoing national debt. If I send a thank-you note to anyone, it will be my grandchildren, who will be paying for this overspending.

Aidan and Maya sent me Christmas thank-you notes with pictures they drew: he shooting his dart gun, she playing with her "pet shop activity center." I shall draw me walking on a red, white and blue vinyl floor.

Wait, I can't draw. Maybe I'll apply my $600 to my next visit to my grandchildren in Nevada and this time indulge my dream of taking the more expensive train one way. As I cross the country, I'll watch the economy I helped revive. On the way back, I'll fly over numerous pork projects that still require more money than the government has.

But wait! I might need that $600 to pay state and local tax increases (which Massachusetts tax lovers will assume we can all afford now, because we got the rebate). Last week H.B. 2840 was on the House calendar; if passed into law, it will exclude some lower-income seniors from future Proposition 2 overrides.

Advocates admit that the reason for this is to keep seniors from voting against overrides, so that the property tax increases will pass. Even though Marblehead isn't planning an override this year, eventually this exclusion could raise my property taxes more than I can afford I'd have to pay my share and that of the excluded seniors.

Not only that, but a recent column in this newspaper made "the case for raising taxes." Brian Watson wrote that first there should be some "easy reforms" to address rising municipal costs, but then, he calls for 1) raising the state gasoline tax by 11 cents; 2) adding a penny to the 5-cent sales tax (that "penny" is a 20 percent increase on the 5 percent sales tax, folks) except for the tax on automobiles, which he would increase to 8 percent, except for luxury cars, which would be taxed at 10 percent; and 3) another state government attempt to create a graduated income tax.

Fortunately, the grad tax requires a constitutional amendment, which voters have defeated, so far, five times. It drives liberals crazy that they can't tax "the rich" at a higher rate than 5.3 percent. However, most voters understand that when politicians can pick us off one tax bracket at a time, there will be no limit on how high our income tax can go.

Plus, House and Senate leaders are considering a $1 cigarette tax increase, to $2.51 a pack. I don't smoke, but when present smokers quit or die, and if young people aren't considerate enough to start, then we'll all have to pick up the cost of the programs that the cigarette tax funds.

But wait! I myself am a senior citizen now. I might be eligible for that property tax override exclusion (I can write thank-you notes to my younger Marblehead acquaintances who'd be paying my share). I already have most of the sales-taxable items that I need. Hopefully, my car will last until the state decides to get elderly drivers off the road and I've never owned a luxury car, for sure. And when I retire, the state income tax rate won't matter so much.

Hey, I'm almost 65, I'm getting a rebate, and my tax future is so bright I need bifocal shades. As more boomers join, the AARP can be renamed the AAGG (American Association of Greedy Geezers) and soon will be running the country itself. And our grandchildren will eventually pay for everything!

I'll write mine a thank-you note every month, and seal it with a kiss.

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