Taxing times on Beacon Hill
© by Barbara Anderson

The Salem News
Wednesday, October 30, 2013


From the State House News Service Advances, week of November 10:

“TAX FAIRNESS COMMISSION: The commission will vote on “Principles of Good Tax Policy,” hear a briefing from the chairs, and will receive a data presentation from the Office of Administration and Finance. Rep. Jay Kaufman and Sen. Michael Rodrigues chair the commission. (Tuesday, 1:30 p.m.).”

Ah, gee, I didn’t get invited to serve on this commission, though I’ve served on others. I think the oversight may reflect my long-standing grass-roots resistance to a graduated income tax, which was defeated on the statewide ballot several times. I suspect this commission will decide that a grad tax is the definition of “tax fairness.”

In 1981, new to the Statehouse, coming off CLT’s ballot victory that created Proposition 2½, I was appointed to Gov. King’s Commission on Restructuring State Government. I was so excited: I thought we were actually going to restructure state government!

If I remember correctly, we had only three months to get that job done, but in my youthful naïveté, I saw no reason we couldn’t do it. The more experienced chairman of the commission, Jack Delaney from Bank of Boston, knew better. He announced at the first meeting that he wasn’t going to waste our time, so we were going to find one part of state government that needed restructuring, focus on that, and get it done.

If I recall, we came up with a recommendation about juvenile incarceration, which may have been accomplished. As I researched this column on Google, I was saddened to learn that Jack Delaney died in 2010. In his comprehensive, high-achievement obituary, this commission wasn’t mentioned, which tells you something about these commissions in general.

Sometime in the ’90s, I served on Gov. William Weld’s Commission on Alternative Funding for Education. The chairmen were state Sen. Stan Rosenberg, D-Amherst, who was dreaming of a graduated income tax, and probably still is as he waits his turn to be Senate president; and state Rep. Jay Kaufman, D-Lexington, the House chairman of the new Tax Fairness Commission.

We spent months interviewing experts about the tax system and eventually released a report with recommendations that I wonder if Rep. Kaufman found in its burial place and shared with his new commission. Sen. Rosenberg was talked out of his grad tax, the members who wanted local income or sales taxes learned from many sources that this was a bad idea, and I think the final recommendation was about local aid funding formulas. I was able to include a minority recommendation that we fund education with taxpayer-funded vouchers that would give parents real school choice.

Well, education is still being funded by the property tax and local aid, but Gov. Weld’s encouragement of charter schools is still supported by the Legislature, albeit with a cap on the number of charter schools, lest there be too much choice for parents.

In 1998, I served on Gov. Paul Cellucci’s Transition Team for Economic and Fiscal policy. I like to think this led to his 1999 decision to work as a partner with CLT on a ballot question to roll back the state income tax rate, which had traditionally been 5 percent until it was raised “temporarily, for 18 months,” in 1989.

In 2000, CLT and Gov. Cellucci won their ballot question for a three-year rollback of that “temporary” tax increase. The rollback was frozen two years later at 5.3 percent by the Legislature with another promise, to slowly continue the rollback when state revenues allow.

It’s now a quarter-century since the first promise that the rate would return to 5 percent, and we just learned from preliminary revenue data that next year, the rate might drop to 5.2 percent. Hooray!

My first recommendation for “Principles of Good Tax Policy” would be, when voters are promised that a tax increase is temporary, the state government should keep its word. My second would be, when voters make a decision on tax policy, their decision should be respected.

In honor of the new Senate chairman, Michael Rodrigues, D-Westport, I’d suggest a principle that legislators who vote for a tax increase in the sales tax on liquor should not get caught buying liquor just across the border in tax-free New Hampshire, as Rodrigues was in 2009.

That’s three Principles of Good Tax Policy. While we wait to see the commission recommendations, I’ll just toss off a few more from the top of my head — recognizing that I haven’t sat through commission testimonies lately.

4. All taxes hurt someone and do some damage to the economy. This is why it’s better not to over-utilize any one tax, to have a mix. However, this mix shouldn’t add up to the fourth-highest tax burden in the nation.

5. In the service of avoiding an even-higher tax burden, there should not be a graduated income tax, which has less to do with making the rich pay a larger percentage of their income than with letting politicians pick us all off, one tax bracket at a time, spiraling upward year after year.

6. Don’t waste the money collected in taxes.

To be continued, as the commission works toward its official recommendation for Tax Fairness, due March 1, 2014.

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.

More of Barbara's Columns

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