May's silly talk of higher taxes could become reality in July
by Barbara Anderson

The Salem News
Thursday, May 12, 2011

So there they were, the usual suspects liberal legislators, liberal activists, liberal and/or greedy public employee union leaders some 800 silly-strong, at a Revenue Committee hearing on Beacon Hill last week, supporting a hike in the state income tax rate back to 5.95 percent.

Not that they called their proposal a "tax hike" or even a "revenue hike." No, S.1416 is called "An Act to Invest in Our Communities." The "investors" include groups that call themselves "Yes!..." as in, "Yes!Raise taxes on people who would rather invest their money elsewhere, especially those who might invest it in creating jobs!" Along with the income-tax rate increase, the bill increases the capital gains tax rate from 5.3 percent to 8.95 percent.

Yes!Northampton member Sara Weinberger was quoted in her local newspaper as saying she was not surprised the measure faced little opposition at the May 5 hearing.

"I feel more strongly than ever about it," she said. "There are few arguments against doing this."




Photo courtesy of The Hampshire Gazette.

No!That's not exactly correct, Sara. The reason your $1.3 billion income tax hike bill faced "little opposition" at the May 5 hearing is that it's ridiculous, and normal people aren't taking it seriously enough to take them away from their day jobs, if they still have one in this recession.

However, Citizens for Limited Taxation has seen similar silly proposals eventually cut into the income we use for our own investments (i.e., paying bills, buying gas), so CLT's Chip Faulkner was the "little opposition" noted above.

He got there early to sign up first, and then sat for two hours listening to testimony from, first, liberal legislators, then all the liberal activists, unions and Yes!groups. Eventually he called a point of order, demanding to know why, despite his early sign-up, only one side was getting heard at the hearing.

This query seemed to confuse presiding officer Sen. Gale Canderas, D-Wilbraham, so she let him remind the committee that voters had rolled back the income tax rate from 5.95 percent to 5 percent in 2000. The Legislature stopped the rolling "temporarily" at its present 5.3 percent in 2002 so really, it should be cut to 5 percent as voted, instead of being hiked again.

There was another hearing scheduled this week on the sales tax, which was also raised recently from 5 percent to 6.25 percent. CLT supports returning it to its traditional 5 percent rate, but Faulkner will not be sitting through another useless hearing. The liberals will point out that voters refused to cut the rate to 3 percent when given the chance on last year's ballot, so they must like it where it is. This is a predictable response to voters' missing a chance to send a message, even if they think a proposal "goes too far."

In fact, it's also predictable that liberals/unions now reward the voters for their "reasonableness" by demanding another tax increase. (It's the income tax's turn this time. We can have another sales tax hike next year. Remember: There's no upper limit until you reach 100 percent).

The theme of the "Invest in Our Communities" hearing: "Get the rich" by creating a "more fair and progressive tax system by asking the wealthy to pay more of their income while increasing deductions for lower and middle-class families," according to its sponsors. The personal deduction would increase from $4,400 to $7,900, which effectively graduates the rate structure.

The bill's sponsor, Rep. Jim O'Day, D-West Boylston, explains: "It allows us the flexibility to make it more progressive than making it a graduated income tax, something that would require a change in the state's constitution."

Only two things wrong with that part of the plan:

A.) Something similar has been tried before, to get around the voters' refusal (five times) to change the Constitution to allow a graduated income tax. In 1986, the SJC ruled that when your bill shows intent to "tax the same class of income at different rates," you can't do it. And with his words, sponsor O'Day shows that intent.

B.) In the past, when the personal exemption was raised to make a rate increase more palatable, the personal exemption was reduced again once the rate increase was safely in place.

You can't trust liberals, and you really can't trust the public employee union leaders. The Massachusetts Teachers Association buses people to the hearing in an effort to keep the union gravy train running; while AFL-CIO president Bobby Haynes demands higher taxes from the engineer's seat on that train.

The greedy geezers at the Mass. Senior Action Council also supported the bill, which exempts them from the capital gains tax increase.

However, while it's easy to dismiss the usual suspects, we know that a tax increase which appears silly in May often gets passed in July, if the state budget is still unbalanced.

Sending written testimony in opposition, Sen. Bruce Tarr, R-Gloucester, warned that "taxpayers shouldn't be lulled into a false sense of complacency just because the House passed a budget with no new taxes. The reality is that some legislators are intent on pursuing every available avenue to raise taxes."

So are a lot of liberals and public employee unions. And in the past, they have usually gotten their way.

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.

More of Barbara's Columns

Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    508-915-3665