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.
