December 14, 2011

A 68-Year Old "Temporary Tax" Hike?


For Immediate Release


From all indications and recent reports, beleaguered taxpayers of Massachusetts are about to receive a miniscule installment of the long-overdue income tax rollback. This is the first reduction in nine years since the Legislature overturned the voters’ 2000 mandate and in 2002 “froze” the income tax rollback.


The income tax rate was raised "temporarily, for 18-months" in 1989 — twenty-two years ago — from its historic 5 percent. CLT put the rollback of the "temporary" income tax hike on the 2000 ballot — eleven years after it was imposed "temporarily" — where it won with 60 percent of the vote statewide.

Was it a promise, or wasn't it?
News accounts of the 1989 "temporary, 18-months" tax hike

The Legislature "froze" the voters' mandate in 2002 at 5.3 percent with a promise to lower it more — when fiscal conditions improved and certain economic "triggers" were met.


Conditions apparently never improved sufficiently, triggers were never pulled, the rate remains at 5.3 percent where it was when the Legislature "froze" it — nine years ago. It has yet to budge.


But it's expected to finally nudge downward — a whole five one-hundredths of one percent — on January 1st. Apparently that light trigger pull is unavoidable, and has value by providing a certain if minimal amount of political cover.


At this rate — a .05% decrease each nine years — the voters' 2000 mandate might finally be accomplished, the 5 percent historic rate might eventually be reached — forty-five years from now, in the year 2057.


We’re happy for any tax cut whatsoever, but will any of us be alive to see the promise finally kept?


Let this definition of a "temporary tax hike" be duly noted in the annals of Massachusetts government doublespeak:  It translates into sixty-eight years, if we're lucky.


The Massachusetts "Temporary" Income Tax Hike Lie
Two-Plus Decades and Counting of a Broken Promise





Jul. 26, 1989

Gov. Michael Dukakis signs "18-month temporary" income tax hike into law, raising the 5% rate by 15% to 5.75%.


Dec. 6, 1989

CLT files sufficient signatures for ballot question to roll back income tax rate and fee increases to 1988 levels.


Jul. 20, 1990

Income tax rate raised to 6.25% immediately and will remain there through 1991, when it is scheduled to drop to a permanent 5.95% thereafter.


Nov. 6, 1990

CLT ballot Question 3 to cut income tax and fees is defeated by vote of 60%-40%.


Jan. 1, 1992

Income tax rate drops by .3%, from 6.25% to 5.95%.


May 4, 1998

CLT income tax rollback petition blocked by teachers union. After lengthy challenge court rules signatures 26 shy of required 64,928.


Jan 1, 2000

With second CLT rollback petition heading for the November ballot, income tax rate is dropped from 5.95% to 5.85%.


Nov. 7, 2000

Second rollback petition drive/ballot question wins by 60%-40% vote: "Temporary" income tax hike to be rolled back from 5.85% to 5% over three years.


Jul. 19, 2002

Legislature "temporarily freezes" voters' income tax rollback mandate at 5.3%.


Jan. 1, 2012

5.3% income tax rate set to drop .05% to 5.25%.


Jan 1, 2057

Projected date, at a reduction of .05% each 9-year period, when the 1989 "temporary" income tax hike is finally restored to its historic 5% rate.




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