CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Wednesday, July 12, 2006

Gabrieli announces tax rollback plan:
"When pigs fly"


Democratic gubernatorial candidate Chris Gabrieli outlined a plan Tuesday to roll back the state's income tax to 5 percent by tying the cuts to growth in economic revenue.

Under Gabrieli's plan, the current 5.3 percent would be cut gradually: the more tax money the state brings in, the faster the rate would fall.

Gabrieli spokesman Dan Cence said the income tax rate could be down by 5 percent by the time Gabrieli's first term would expire, in four years.

Associated Press
Tuesday, July 11, 2006
Gabrieli outlines plan to roll back income tax


Gabrieli's plan would allocate 40 percent of the state's tax revenue growth to pay for tax cuts and 40 percent for new spending and increasing local aid, while setting aside the remaining 20 percent for the government's rainy day fund.

Gabrieli for Governor Campaign
July 11, 2006
Gabrieli Unveils Plan to Responsibly Rollback Income Tax to 5.0%
Ties Rollback to State's Economic Health;
Faults Romney/Healey for Lack of Results


In 2006, the rate is still at 5.3% as the economy rebounds and revenues grow. Chris Gabrieli says it is important to honor the votersí decision, when the state gets around to it, maybe by 2010 Ė twenty-one years after the "temporary" increase, ten years after the voter mandate, after it does a lot of other stuff, when the planets align and pigs fly.

Maybe voters should elect Chris Gabrieli, but not let him take office for ten years, when the planets align, and pigs fly.

CLT NEWS RELEASE
July 11, 2006
Gabrieli Tax Plan


Chip Ford's CLT Commentary

Democrat candidate for governor Chris Gabrieli yesterday announced his "responsible" plan to rollback the now seventeen-years old "temporary" income tax hike to its historical 5 percent:  by the time his term expires in 2010, if elected.  Now there's a political promise we can all take to the bank!

For this voters should cheer him?

It's ingrained in Democrats to spend every cent that comes into state coffers, raid the so-called all-important "rainy day fund" (for $550 million more in just next fiscal year's budget) to spend even more, but to return any surplus to taxpayers only somewhere down the road, someday, in the distant future, maybe.

Gabrieli "faults" the Romney administration for "lack of results" -- but Governor Romney has included the tax rollback in every one of the budgets he's submitted; he and Lieutenant Governor Healey have pushed for it at every opportunity and Healey, now the Republican candidate for governor, is still doing so.  It was Gabrieli's fellow Democrats in the Legislature who've refused to budge, refused to keep their promise made in 1989 -- who've instead spent every cent of the state's annual surpluses.

Poor Mr. Gabrieli thinks he can somehow do better, ever?

Gabrieli recognized in his news release:  "If we ignore the people's overwhelming vote to reduce taxes to 5.0%, as some in this race would have us do, we run the risk of fueling further cynicism and mistrust at a time when we should be restoring people's confidence in government."

So his plan is to not ignore the voting majority so they will hopefully elect him.  But not ignoring them isn't the same as respecting them, abiding by their ballot decision of six years ago.

For then he proposed to divvy up any future surpluses, "40 percent for new spending and increasing local aid . . . 20 percent for the government's rainy day fund" and finally -- allegedly to keep faith with the voters' 2000 mandate, he graciously added in 40 percent of any surplus toward finally rolling back the income tax rate.

By the time his term expires in 2010, if elected.

I believe Chris Gabrieli as much as I believe that Attorney General Tom Reilly, another Democrat candidate, had an overnight conversion and suddenly wants to rollback the tax right away!

Barbara said it best in our news release:  "Maybe voters should elect Chris Gabrieli, but not let him take office for ten years, when the planets align, and pigs fly."

Chip Ford


Associated Press
Tuesday, July 11, 2006

Gabrieli outlines plan to roll back income tax
By Brooke Donald


Democratic gubernatorial candidate Chris Gabrieli outlined a plan Tuesday to roll back the state's income tax to 5 percent by tying the cuts to growth in economic revenue.

Under Gabrieli's plan, the current 5.3 percent would be cut gradually: the more tax money the state brings in, the faster the rate would fall.

Gabrieli spokesman Dan Cence said the income tax rate could be down by 5 percent by the time Gabrieli's first term would expire, in four years.

The income tax rate is a hot topic among candidates for governor. Voters approved a cut to 5 percent in 2000 but the Democrat-controlled Legislature froze that at 5.3 percent when the state's economy tumbled.

Gabrieli's Democratic opponents are split on the issue, with Deval Patrick saying it is not the right time to cut the income tax and Attorney General Tom Reilly saying he supports one.

Republican candidate Lt. Gov. Kerry Healey supports an immediate rollback.

"I disagree with those who say we should not cut the income tax to 5 percent at all. I also disagree with those who offer no specifics yet insist we can cut taxes all at once," Gabrieli said in a statement before his planned speech to the South Shore Chamber of Commerce. "We need a fiscally responsible approach that will get real results for the taxpayers of Massachusetts."

Gabrieli's plan would allocate 40 percent of the state's tax revenue growth to pay for tax cuts and 40 percent for new spending. The remaining 20 percent would go into the government's "rainy day" fund.

If revenue grows by 6.5 percent, which is the historical average according to the Massachusetts Taxpayers Foundation, then Gabrieli says taxes could be gradually cut -- reaching 5 percent in 2010.

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Gabrieli for Governor Campaign
July 11, 2006

Gabrieli Unveils Plan to Responsibly Rollback Income Tax to 5.0%
Ties Rollback to State's Economic Health;
Faults Romney/Healey for Lack of Results

RANDOLPH, MA - Citing the importance of keeping faith with the taxpayers in an honest and fiscally responsible way, gubernatorial candidate Chris Gabrieli today laid out his plan to roll back the state's income tax from 5.3% to 5.0%.

"I think we have to get to 5.0% as quickly and responsibly as we can," Gabrieli said in a speech to the South Shore Chamber of Commerce in Randolph. "I disagree with those who say we should not cut the income tax to 5.0% at all. I also disagree with those who offer no specifics yet insist we can cut taxes all at once. We need a fiscally responsible approach that will get real results for the taxpayers of Massachusetts."

Gabrieli, who co-founded his own company and spent 15 years helping other businesses grow and succeed, outlined a plan to cut income taxes gradually by tying them to the state's financial health. Gabrieli proposed a formula that locks state government into a commitment to cut taxes by tying the cuts to the state's tax revenue growth above inflation. The more tax money the state takes in, the faster the income tax rate will fall to 5 percent.

Gabrieli's plan would allocate 40 percent of the state's tax revenue growth to pay for tax cuts and 40 percent for new spending and increasing local aid, while setting aside the remaining 20 percent for the government's rainy day fund.

If revenue grows by 6.5%, which is the 25-year historical average according to the Massachusetts Taxpayers Foundation, then we could cut taxes in 2008 to 5.2% in 2009 to 5.1% and in 2010 to 5.0%, while pumping $1 billion into new programs and local aid, and reserving $800 million for the rainy day fund.

"These are real numbers, and this plan brings the kind of accountability that has been lacking on Beacon Hill for too long," Gabrieli said. "This Romney-Healey administration has proven they cannot be trusted to cut taxes responsibly. And for 16 years, it's clear our people have been unwilling to trust a Democrat at the fiscal helm. I want to change that."

Gabrieli also questioned how some of his opponents could promise a tax cut all at once.

"Simply put, it would be fiscally irresponsible to go to 5.0% immediately," he said. "I've been looking at budgets most of my adult life and the numbers just don't add up."

Next year, the consensus revenue estimate includes $18.9 billion in tax receipts. The FY 07 budget just passed by the Legislature has us running a deficit of over 500 million dollars, which would have to come from the Rainy Day Fund. According to the Massachusetts Taxpayers Foundation, just to balance this budget, growth would have to be higher than the consensus budget estimates to the tune of over 500 million dollars, while an additional $600 million would be required to cut taxes to 5.0% immediately.

"We can't cut taxes all at once. That's the bottom line," Gabrieli said. "I think a governor has to be honest about the financial choices we face as a state, and be realistic about what we can and can't accomplish."

Gabrieli said it is important to honor the voters' decision to lower the income tax rate, and to return a portion of the money gained as our economy rebounds and revenues grow.

"If we ignore the people's overwhelming vote to reduce taxes to 5.0%, as some in this race would have us do, we run the risk of fueling further cynicism and mistrust at a time when we should be restoring people's confidence in government," Gabrieli said. "The reality is that tax cuts have become more political football than fiscal policy. To me, it doesn't matter whether this tax cut or any other idea comes from Republicans or Democrats - what matters is that we get the job done."

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CLT NEWS RELEASE
July 11, 2006

Gabrieli Tax Plan

Not a good day to announce or rebut a tax plan, but CLT must respond to Chris Gabrieliís news release.

Gabrieli said "it is important to honor the votersí decision to lower the income tax rate, and to return a portion of the money gained as our economy rebounds and revenues grow." Sweet of him. Letís go over the history one more time, for Mr. Gabrieli:

The state promises in 1989 that an income tax increase will be "temporary." A decade of rebounding economy and growing revenues passes, as the state spends itself into another fiscal crisis. Voters take matters into their own hands and in 2000, order the state to restore the income tax rate to 5 percent by 2003.

In 2006, the rate is still at 5.3% as the economy rebounds and revenues grow. Chris Gabrieli says it is important to honor the votersí decision, when the state gets around to it, maybe by 2010 Ė twenty-one years after the "temporary" increase, ten years after the voter mandate, after it does a lot of other stuff, when the planets align and pigs fly.

Maybe voters should elect Chris Gabrieli, but not let him take office for ten years, when the planets align, and pigs fly.

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