A PROMISE TO KEEP: 5%
A Ballot Committee of
Citizens for Limited Taxation & Government
PO Box 408 * Peabody, MA 01960
Phone:(617) 248-0022 /(508) 538-3900 E-Mail: cltg@cltg.org
Visit our web-page at: http://cltg.org
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*** Promise Update ***
Wednesday, October 15, 1997

The Boston Globe
Wednesday, October 15, 1997
Metro/Region
Panel delays action on tax rollback plan
By Doris Sue Wong
Globe Staff

Acting Governor Paul Cellucci wants to roll back taxes now. A key legislative committee yesterday gave him his answer: Maybe next year.

The Legislature’s Joint Committee on Taxation gave itself until the end of next year to evaluate Cellucci’s proposal to push back the earned income tax rate from 5.95 to its previous rate of 5 percent over three years. Such a cut, when fully in force, would reduce state tax revenues by about $1.2 billion a year.

The cochairmen of the committee said committing the bill for an in-depth study doesn’t mean it can’t be acted on this fall, as Cellucci would prefer. But they clearly indicated that, while they aren’t necessarily opposed to tax rollbacks, they see no need to rush such a momentous vote.

The panel, they noted, routinely takes time to study the nearly 800 tax proposals that come before it each session - none of them nearly on this scale.

"It amounts to roughly the same amount as the 20 other tax cuts we passed over the past seven years," said Warren Tolman, Democrat of Watertown and Senate chairman of the committee. "So we thought it would be prudent to check some of the numbers and revenue and proceed with caution."

At a committee hearing on the bill yesterday, Cellucci called such a tax rollback eminently affordable, given the expectation that the state will end the fiscal year with a $350 million surplus, $100 million more than originally projected. The surplus would be more than enough to pay for the first year of his proposed tax cut.

"This money is not the government’s money anyway. It’s the taxpayers’ money," Cellucci told the committee.

State Treasurer Joseph Malone, who will challenge Cellucci in next fall’s GOP primary, also testified in favor of the tax cut.

But committee members were not so easily swayed. Before making up their minds on the merits of the plan, they said they want more information, not only concerning revenue projections but also the history of revenue growth over the past three decades. The question, they said, is not so much what the state can afford now, but whether, over the long term, it is prudent to write off so much in revenues.

"Clearly, the revenues are coming in strong," said Peter Larkin, a Pittsfield Democrat and House chairman of the committee. "But one or two years doesn’t tell the whole story."

The committee has been researching more modest alternatives to Cellucci’s proposal.
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The Patriot Ledger
Saturday, October 11, 1997

Voters put in a taxing situation
By Barbara Anderson

When I need a break from outrage, I think about the things that merely disgust me:

Politicians who vote for higher taxes, but don’t bother filing tax returns themselves. Rep. Byron "I’m too special to pay taxes" Rushing extolling the virtues of taxpayer-funded government on the House floor.

Politicians—some of whom didn’t pay state income taxes themselves—refusing to keep their 1989 promise to restore the 5 percent income tax after the deficit bonds were paid.

House Ways and Means Chairman Paul Haley’s insistence that the state can’t afford to roll back the rate because the Big Dig is costing more than expected. Sure, Mr. Chairman, we all believed that they were going to dig up the entire city of Boston for only $2.8 billion, and if it cost more the federal government would be happy to make up the difference. Hey, Mr. Chairman: remember your hearing on constitutionally guaranteed legislative pay raises, at which Sen. Diane "I’m too special to pay taxes, too" Wilkerson asked me if there are any state legislators I respect.

Politicians who argue that different politicians are in office now than those who promised the income tax increase would be temporary. If promises are only good for as long as the politicians making them are in office, someone warn NATO that the treaty has expired. Is this what happened to the Indians?

Politicians who express indignation about abuse of power by the IRS and state Revenue Department, without mentioning who passes the complicated, vague, impulsive, badly written, rarely thought-out, lobbyist-influenced, campaign contribution-influenced, open-to-interpretation, impossible-to-fairly-enforce tax legislation in the first place.

Massachusetts state tax policy, which will be the last in the nation to finally treat military pensions the same as state employee pensions by exempting them both from taxation, but remains the only state in the union to tax other retirees’ dividends and interest at more than twice the rate of wage and salary income.

The Tax Equity Alliance of Massachusetts, arguing that cutting this tax for senior citizens would cause more of them to stay here, thereby bringing down the state’s per capita income. Strange bedfellows: TEAM and John "When you’re ripe it’s time to go" Silber.

Political doublespeak. The new sales tax on real estate isn’t a tax, some House members insisted during debate, it’s a betterment assessment. I looked up "betterment assessment" in my Finance Committee handbook. It is a special property tax assessed to reimburse the government for the cost it incurs in providing a public improvement that directly benefits only the assessed property owner—sewer lines, sidewalks, etc.—and is assessed only his proportionate share of the cost. But the new sales tax, intended to buy open space somewhere in the community, is paid as a percentage of price by a buyer or seller of property who is just moving in or just moving out, who gets no betterment that the entire population doesn’t enjoy.

Rep. Ron Gauch, R-Shrewsbury, tried to amend the Cape Cod Land Bank bill to call the new tax a tax; his "truth in packaging" amendment lost 30-121.

Is this some sort of Beacon Hill theme of the month, making someone else pay taxes while special people just get to vote for them? It’s an epidemic: first Wilkerson, Rushing, Swan, Reinstein, and now all the voters who support buying open space as long as someone else pays for it. In many communities, taxpayers vote for Proposition 2 ½ overrides to buy open space. On Cape Cod, taxpayers will vote to make newcomers, who are unrepresented, pay the whole bill.

Even if the final version of this bill places the tax on the seller, the person who pays it will always be the one who is at a disadvantage in the marketplace. As land on the Cape becomes more dear, this will almost always be the buyer— unless we mainlanders decide we don’t want to go where we’re not wanted.

This will get tougher, of course, as the Legislature gives other communities the tax, and it increases at regular intervals, to pay for other things besides open space. There’s no end to what the many can tax the few to get for free.

Only 31 House members voted against the Cape bill; an earlier Senate vote had no roll call, but it is assumed there are enough votes in both branches to override Acting Gov. Paul Cellucci’s veto of the new tax. Two-thirds of Massachusetts legislators favor taxation without representation—that’s disgusting.

Barbara Anderson is co-director of Citizens for Limited Taxation and Government.

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