CLT News Release
Wednesday, January 31, 2018
Taxes: The Dems’ Opioid
of Choice
Chip Faulkner, CLT’s communications director, will testify before the
Joint Committee on Revenue in favor of the sales tax rollback petition
(H.4114) at 2:00 PM in State House Room B-2.
In 1976 the sales tax was increased from 3% to 5%.
During the "Massachusetts Miracle" of the '80s annual revenue growth
averaged 13 percent from 1984 to 1987. Then came the high-tech bubble
crash. Revenue growth dipped to 4.3 percent in fiscal years '88 and '89.
This led to the "temporary, only 18-months" income tax increase.
Twenty-nine years later — a generation — we are still paying that
"temporary" income tax hike, though the high-tech industry’s fortunes
rebounded robustly.
From 1991 to 2008 state spending grew from $9 billion to $28 billion,
more than double the rate of inflation.
Then came the housing boom crash accompanied by "The Great Recession."
In 2009 this led to the Legislature hiking the sales tax by 25% — from
5% to 6.25% (over Gov. Deval Patrick's veto) that was projected to raise
an additional $900 million a year.
Ten years later — a decade — state spending has grown to $40 billion,
the economy has rebounded and expanded, housing prices have recovered
and increased in value, state revenue has grown, and we're still
paying that increased sales tax.
On Beacon Hill, like legislative salaries and benefits, taxes move only
in one direction, defying gravity. The only time that direction is
reversed is when the governed have suffered enough and are forced to
take direct action through the initiative petition process.
This happened on the 2000 ballot when the “temporary” income tax hike of
1989 was overwhelmingly rejected by the voters. Despite the voters’
mandate, the Legislature “froze” the rollback two years later, in 2002,
with its “triggers.” Thirty years after the promise was made and broken
over and over, the income tax is expected to drop to 5.05% next year.
The only force behind sane tax policy and limits on government taking
and spending is the people, the governed, the taxpayers— when they have
suffered enough abuse and are forced to take direct action through the
initiative petition process.
This is one of those times and, as always, it is past due.
CLT executive director Chip Ford said: “There is a limit on what
taxpayers can afford, and a limit on their patience. The crises that led
to tax increases have long ago passed. Lack of revenue is not the
problem in Massachusetts. As usual, profligate over-spending is
the problem that needs to be contained.”
Citizens for Limited Taxation strongly supports rolling back the sales
tax to 5%.
#
# #
Citizens for Limited Taxation ▪ PO
Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
