CLT&G Update 4/13/97 Beware the Ides of April By Barbara Anderson

Citizens for Limited Taxation & Government
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Phone: (617) 248-0022 * E-Mail: cltg@cltg.org
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The Patriot Ledger
Saturday/Sunday, 12-13 April 1997

Beware the Ides of April
By Barbara Anderson

Beware the Ides of April. On that day, we render unto Caesar a whole lot more than the founding fathers thought we would ever have to render. Actually, our own fathers, back in 1950, only rendered about 5 percent of the family income in federal taxes. Now, it's closer to 24 percent, and that's before other taxes increase it to about 40 percent.

And what do we get for all this rendering, that we couldn't supply for ourselves, if we got to keep more of our own money?

Somehow the debate for a federal balanced budget turned into an argument against a federal tax cut. Yet whenever there's a move to cut middle-class entitlements, middle-class people argue that they should get something in return for 24 percent of their income, and they've got a point. So we cling to our entitlements, and the government clings to our money; there's not enough to give to the needy and also to the givers, so the debt continues to accumulate.

Congress has failed to pass a balanced budget amendment and does not seem inclined to cut taxes this year. In fact, a Republican and a Democrat -- Sens. Orrin Hatch and Ted Kennedy -- are planning a tax increase and a new entitlement program. The concept seems to be to increase cigarette taxes to both discourage smoking and fund health care for children; if the first is achieved, the second will need more taxes from us non-smokers for its funding. But isn't it nice to see a Republican and a Democrat working together to take our money, instead of all that nasty partisan squabbling?

Our Massachusetts Legislature has already run that scam here, with a promise that if smoking revenues decline, the health care program will be cut. Of course, they lied. They figure by the time a tax increase is necessary to continue the funding, we'll have elected a governor who didn't take that annoying no-new-taxes pledge.

The House budget contains spending increases but no tax cuts. Even though the last of the Dukakis deficit bonds are paid off this year, the Legislature intends to keep the income tax increase and the telecommunications sales tax that were passed during his fiscal crisis and spend every cent of them forever. No income tax cut, no inflation-adjusted cut in the dependent deduction, no fairness for military retirees who pay taxes on their pensions while Massachusetts government employees do not.

Massachusetts will continue to tax our investment in our own futures at 12 percent, the only double tax on so-called "unearned income" in the country. This tax has always been unfair, but the fact it is a disincentive to savings is a bigger problem now that we realize that the federal government is spending Social Security taxes for operating expenses. Younger people will have to start saving for their own retirement, but it's hard when the state's greed takes a disproportionate share of the interest.

Massachusetts shoppers will still have to go to New Hampshire to avoid our sales tax, cigarette tax and liquor tax. Yet Massachusetts legislators will collect the pay raises that help them offset their taxes, and those who live more than 50 miles from the State House will get their federal tax breaks. Speaker Tom Finneran will consolidate his power by giving bonus pay to his allies, including Rep. Kevin Fitzgerald, who needs more money to pay back the amount he took from the bag lady's estate. To each of the speaker's pals according to his needs, from you according to your ability.

Since conservative legislators always attempt to add a tax cut to the state budget during the House debate, the new House leadership had planned to enact a rule that would not allow tax-cut amendments this year. The House leadership argued that the tax cuts should have a public hearing instead of being included in the budget. This was the same House leadership that rammed through a change in the state stabilization fund without a hearing last week, thereby stealing from us future tax cuts to which we were entitled when that fund was full.

The budget is the obvious place to decide to downsize revenue, before the entire $18.3 billion is spent and the cuts become "unaffordable." Fortunately, the usually docile House members objected to being told that they could not offer amendments, so Finneran backed down for now on the new rule. This means we still have a slim chance for a mid-April tax cut before the taxpayers are rendered once again.

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