CLT
UPDATE
Thursday, October 9, 2003
Robin Hood revisited
We have heard all the “soak the rich” arguments during five graduated income tax ballot campaigns, but they were rejected by voters so let’s set them aside. Even if the argument worked, it would not apply to the property tax, which isn’t necessarily connected to ability to
pay. Home values reflect market forces that often have little connection to personal finances. None of us know what extraordinary expenses
(health care, family-care, charitable commitment) a taxpayer has to offset his income or property value....
We recommend that the Governor’s veto be sustained, and that Cambridge officials begin a campaign to encourage Cambridge liberals to voluntarily contribute more in property taxes to their city government. Publicly recognize them. Award them a little medal. Then let the rest of Cambridge’s taxpayers pay their own fair share -- the tax rate times their property value. If it’s too much, get control over city spending; if it’s too little, have a Prop 2½ override like the rest of us.
CLT Memo to the Legislature
Wednesday, October 7, 2003
Governor Romney’s veto of the Cambridge Graduated Property Tax Hike
To keep city tax revenues the same, Cambridge will have to increase tax rates on other properties -- such as those valued above $1 million, or homes with nonresident owners. Renters in larger buildings might be hit with higher rents, too....
While the House entertained no debate on the issue before voting, senators engaged in a fiery discussion of the bill, which Republican State Senator Brian P. Lees, the minority leader, decried as a "backdoor tax hike."
"You are voting for a tax increase for certain property owners in your own town," Lees said, speaking to Senate President Robert E. Travaglini, a Democrat whose district includes part of Cambridge.
Taxpayer rights groups also voiced dismay about the vote, saying it was just one step shy of "walking into the homes of rich people and just stealing from them," said
Barbara Anderson, executive director of Citizens for Limited
Taxation.
"This is a redistribution of wealth, pure and simple," Anderson said.
The Boston Globe
Thursday, October 9, 2003
Cambridge tax law offers relief
Legislature backs measure to lower homeowners' bill
Chip Ford's CLT
Commentary
Yesterday the Legislature overrode another Romney
veto and implemented an alleged "tax the rich" scheme. As we
pointed out in our memo to all members of the Legislature delivered
yesterday, this is even worse than the graduated income tax that's been defeated
at the polls by voters five times, as it doesn't provide even means
testing. You could be property rich (according to ever-increasing
evaluations) but income poor.
The most direct argument against it though is
fairness: why should any segment of the citizenry get a cut-rate
ride on the backs of any minority segment? This is the old "divide
and conquer" tactic that has been behind every proposal for a
graduated income tax: break up taxpayers into smaller groups then
alternately tax each group higher and higher one at a time, because
there'd never be enough critical mass to force a halt to perpetual tax
increases.
One reporter yesterday compared the proposal to Robin
Hood while speaking with Barbara; "taking from the rich to give to
the poor." Barbara pointed out that this is a false interpretation
of Robin Hood's motives and tactics.
"Robin Hood was the first taxpayer
activist," she informed him. "He took from government -- the
Sheriff of Nottingham and wicked Prince John -- and returned it to
overtaxed serfs."
If the Legislature keeps singling out one select
group to tax more than others, beware: you might be its
next targeted tax hike victim -- even if you're not wealthy, or a
smoker!
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Chip
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The Boston Globe
Thursday, October 9, 2003
Cambridge tax law offers relief
Legislature backs measure to lower homeowners' bill
By Raphael Lewis, Globe Staff
Several thousand Cambridge homeowners will see their property taxes drop by an average of $200 a year under a tax exemption bill upheld by the Legislature yesterday.
The legislation, which will allow Cambridge to increase the tax exemption for more than 11,000 owner-occupied dwellings, was vetoed Oct. 2 by Governor Mitt Romney, but the Democrat-dominated House and Senate overrode the veto yesterday by a wide margin.
It is one of several tax-related bills under consideration on Beacon Hill, including one that limits the time taxpayers will have to file for refunds.
With the passage of the provision, Cambridge can now increase its residential tax exemption from 20 percent to 30 percent of a home's assessed value.
That will instantly lower property taxes for 85 percent of all single-family homes, 59 percent of condominiums, 81 percent of all two-families, and 61 percent of all three-families, according to city statistics.
State lawmakers have raised the property tax exemption for Boston and Somerville in recent years, arguing that elderly and longtime residents are being squeezed out of the area by skyrocketing real estate values. While two previous Republican governors backed those home-rule initiatives, Romney disapproved of the Cambridge legislation because it would force the city to increase the annual tax bill for other homes.
To keep city tax revenues the same, Cambridge will have to increase tax rates on other properties -- such as those valued above $1 million, or homes with nonresident owners. Renters in larger buildings might be hit with higher rents, too.
For example, the city estimates that renters who live in buildings assessed at $1.3 million will probably see their annual rent bills increase about $120.
Meanwhile, those who own homes valued at $2 million will see their annual tax bills go up about $583.
Representative Timothy J. Toomey Jr., a Somerville Democrat and a Cambridge city councilor, said he was pleased that the measure passed overwhelmingly in the House and the Senate, by 120 to 24 and 26 to 8, respectively.
He said city leaders would meet at 4:30 p.m. today to incorporate the law into the new tax rate, in time for bills going out this month.
"I'm pleased to say this will take effect immediately," Toomey said.
While the House entertained no debate on the issue before voting, senators engaged in a fiery discussion of the bill, which Republican State Senator Brian P. Lees, the minority leader, decried as a "backdoor tax hike."
"You are voting for a tax increase for certain property owners in your own town," Lees said, speaking to Senate President Robert E. Travaglini, a Democrat whose district includes part of Cambridge.
Taxpayer rights groups also voiced dismay about the vote, saying it was just one step shy of "walking into the homes of rich people and just stealing from them," said
Barbara Anderson, executive director of Citizens for Limited
Taxation.
"This is a redistribution of wealth, pure and simple," Anderson said.
House Democrats are weighing another piece of legislation that could potentially affect state taxpayers.
The measure, which was proposed by the Romney administration and has the backing of Democratic leaders, would create a three-year statute of limitations on filing for a state income tax refund, and would require taxpayers to inform the state if their personal income has increased because of an Internal Revenue Service audit.
The two proposals will generate between $75 million and $120 million over the next three years, state revenue officials have estimated.
Currently, there is no time limit for filing for a refund. But because the state pays interest, compounded daily, if taxpayers delay coming forward, the payout can often be substantially larger than the initial refund, said House Ways and Means committee Chairman John H. Rogers, a Norwood Democrat.
"In effect, the taxpayer gets rewarded under the current system for filing a seriously delinquent return," said Rogers, who predicted the bill would pass the House shortly. "To pay on time and to pay your taxes is the American way, and I think most Americans do that."
From July to September, the state has already paid out $5.5 million in refunds for returns that should have been filed more than three years ago, said Department of Revenue Commissioner Alan
LeBovidge.
LeBovidge called the law changes "pure logic."
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