and the
Citizens Economic Research Foundation

Barbara's Column

Voters, businesses getting what they deserve
with talk of tax hike
by Barbara Anderson

The Salem News
Saturday, May 2, 2009

"You've got to ask yourself one question: 'Do I feel lucky?' Well, do ya, punk?"
Clint Eastwood, in the role of "Dirty Harry" Callahan

On Beacon Hill, the answer to the question is, yes, the punks feel lucky. They voted 108-51 to hike the state sales tax from 5 percent to 6.25 percent.

They think they are ballot-proof, that voters will re-elect them no matter what they do.

Chip and I watched the House debate on his laptop during commercial breaks while watching "24."

Harry Callahan and Jack Bauer would get along. This is why we need their dramas to escape from the reality we create for ourselves by never standing up to the bullies.

The 16 Republicans in the House of Representatives did stand up. They all voted Nay, and 11 went to the podium to fight the tax increase. Rep. Brad Hill, R-Ipswich, held up photos he had taken of businesses in his district that have closed.

It was Clint Eastwood again, but this time not as Dirty Harry, but as Pardner in "Paint Your Wagon" singing, "I Talk to the Trees."

Why should the Democratic trees care about closed businesses? The state Legislature won't go out of business.

One hundred and eight Democrats voted Yea. One border rep, whose businesses must compete with New Hampshire, did speak against the tax hike, noting that unemployment in her district is already higher than in the rest of the commonwealth.

But her fellow Democrats don't care about the unemployed; they figure they will never be unemployed. Harriett Stanley, Mike Costello, Brian Dempsey and Barbara L'Italien, also representing North Shore border communities, voted for the sales-tax hike.

Of the 15 new Democratic House members, 13 voted for it. Ten of the 13 had opponents in November 2008. The voters who chose them over their opponents created enough new votes to override the governor's promised veto of the sales-tax increase.

Yes, Gov. Patrick almost saved the taxpayers. Just before the House budget debate began, he sent a letter telling them he and the voters want "reform before revenues," and since there haven't been any reforms, he would veto this broad-based tax hike. Unfortunately for us, 108 votes can override his veto.

The Massachusetts Senate has also said "reform before revenues." We'll see what senators do with the sales-tax hike when they debate the budget next month. Seven senators who voted for a sales-tax increase in 1990 lost to challengers that fall.

House Minority Leader Brad Jones, R-North Reading, pointed out that along with no reforms, there was no public hearing on a sales-tax increase either. No respect for the voters and with good reason.

Not only did many of them have a chance to elect someone who may have taken the "no-new-taxes pledge," but all voters had a chance to send a message to the Legislature that they were fed up with business as usual on Beacon Hill. If voters had passed Question 1 last November, the Legislature would have repealed it, but that repeal vote may have had reforms attached to it, and this new tax hike may have been avoided.

As the Republicans pointed out during House debate, Massachusetts businesses will be hurt by this tax increase. I feel bad about that, but where I usually shop, the chambers of commerce deserve it.

The North Shore Chamber put out a position statement last fall that repealing the state income tax would "result in drastic cuts to our communities and would directly impact small businesses and job creation, needed for a viable economy on the North Shore."

Let's see how viable the economy is when more shoppers escape to New Hampshire and the Internet.

The Cape Ann Chamber voted to oppose Question 1 before it even attended the debate it had scheduled between me and Michael Widmer of the so-called Massachusetts Taxpayers Foundation. At least Cape Ann had a debate; the North Shore Chamber doesn't allow me to respond when Mr. Widmer speaks. Do Chamber members ever object to his advocacy for higher taxes?

Well, the traditional business community's kissing up to the Legislature really worked this week. While the Chamber didn't put out one of those position statements against the sales-tax hike, it did join with Associated Industries of Massachusetts, another Question 1 opponent, in making cogent, intelligent arguments about the adverse effect on the economy.

Meanwhile Widmer gave the House cover this week by telling everyone that our state sales tax is really low when you relate it to our high personal income. Those North Shore taxpayers with high personal income won't mind the tax hike, then. The rest of us may; but who cares?

The public employee unions are happy now. Reforms in their pension and health care benefits will move off the table once taxes are increased.

However, this sales-tax hike won't solve the state's fiscal problems. Sales-tax revenues will decline; government abuses will grow.

Because of uncontrolled public employee benefits, Vallejo, Calif., just outside Dirty Harry's San Francisco, has declared bankruptcy.

When Massachusetts communities reach that point, contracts will have to be nullified. We'll see who feels lucky then.

The comments made and opinions expressed in her columns are those of Barbara Anderson
and do not necessarily reflect those of Citizens for Limited Taxation.

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