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Limited Taxation & Government
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CLT&G Update
Wednesday, May 20, 1998

"Five Easy Pieces" of B.S.

Greetings activists and supporters;

Don't you just love it when you're just too stupid to know what to do with your own hard-earned money, but you can depend on the Legislature to lend you a helping hand with doing the right thing?

When the Legislature raised the income tax rate back in 1989 to bail the state out of the fiscal mess it had created, it took from us equally: First another three-quarters of a percent on top of the five it had been imposing forever; then another half a percent on top of that. Everyone paid it equally, across the board.

Now that we taxpayers have paid off their crisis and bailed out the Legislature's mismanagement, and there's a billion-dollar-and-growing surplus of our money sitting in their till, in appreciation the Legislature, in its far superior wisdom, has decided for us who needs to get their money back the most, who doesn't need it back that much anyway, and who doesn't need any of it back at all.

Thank goodness we have "The Best Legislature Money Can Buy," else we'd have to worry ourselves how to spend all that extra money we earned but got used to having taken away by the Legislature to pay for its mismanagement.

Who was it that said "From each according to his ability, to each according to his needs"?

If you came up with Karl Marx the Communist, go to the head of the class war.

Welcome back to a full-blown version of the Peoples Republic of Taxachusetts, where socialism has outlived the collapse of the Berlin Wall!

Chip Ford --

PS. The Senate bill -- entirely different from the House "Imperious Maximus" tax bill -- was passed last night and now will go to a House-Senate conference committee, where a final compromise bill will be drafted.


Contact: Alison Franklin 722-1500 May 18,1998


"Tax cuts are a fundamental indication of values. They reflect a vision for our society," said Senate President Thomas Birmingham, who was joined by Senate Ways and Means Chair Stan Rosenberg, Senate Chair of Taxation Warren Tolman and Senate Post Audit and Oversight Chair Cheryl Jacques, in proposing a $543 million tax cut package, with the benefit accruing mostly to average taxpayers.

"This is a well-balanced, progressive tax cut package directed toward those citizens of the Commonwealth most in need of tax relief," said Rosenberg. "At the same time, it is an affordable package that will promote continued economic growth.

The largest component of the tax cut package is doubling the exemption on earned income and making this tax cut effective for the 1998 tax year. "This tax cut returns $443 million to working men and women in an equitable and straightforward way," said Birmingham. "This is a progressive, responsible way to help all taxpayers enjoy our economic good times. Collectively produced wealth ought to be recognized as such."

The second largest component of the tax cut proposal is $78.3 million to eliminate interest and dividend income for seniors of modest means. "A rate cut would give the greatest benefit to those with the largest investment profits," explained Birmingham, "with an exemption we are instead directing relief to those who warrant it most."

In addition to these income tax reductions, the Senate will take up a tax cut, championed by Senator Cheryl Jacques, to help those shouldering the high cost of higher education by making half the interest paid on student loans deductible. "This tax cut will make Massachusetts the first state in America to provide a deduction for interest on student loans," said Jacques. "This proposal is long overdue. The scarcity of grant assistance in Massachusetts has caused a generation of students to go deeply into debt. This tax break will make higher education more affordable and accessible to Massachusetts residents, while creating economic growth through the development of a highly-trained work force."

"The legislation also makes important steps toward bringing the state into compliance with Federal legislation," said Tolman, "which is important for simplifying the process for citizens as well as ensuring they can take full advantage of recent developments." Two aspects of the tax cut proposal will bring the state's tax code into conformity with the federal one regarding IRAs and capital gains on the sale of principal residences.

The five tax cuts are being reported by Senate Ways and Means today [Monday] and will be taken up in the Senate tomorrow [Tuesday].


SHNS . . . MAY 18, 1998 . . . Here's a breakdown of the annual estimated cost of the elements of the Senate Ways and Means tax-reduction package, released today for debate Tuesday:

Doubling the earned income exemption:  $443 million
Unearned-income exemption for middle-income seniors:  $78 million
Roth/education IRA tax breaks:  up to $22 million
Student loan deduction:  $16 million
Capital-gains tax exemption for sale of first home:  $2 million

Citizens for Limited Taxation & Government
18 Tremont Street #608 * Boston, MA 02108
Phone: (617) 248-0022 * E-Mail:

To: Members of the General Court
May 19, 1998
Re:  "Five Easy Pieces"?

So Senate President Birmingham, in his news release, says that "tax cuts are a fundamental indication of values" which "reflect a vision for our society"; then he names his tax package Five Easy Pieces after a film about, to quote a movie review, "an alienated, misfit drifter . . . who chases easy women."

In the film, Jack Nicholson played Robert Eroica Dupeau, an unfaithful, uncommitted wastrel who abandoned his pregnant girlfriend; perhaps he's a prototype of the state Legislature, a wastrel that abandons its promise that an income tax rate increase will be temporary.

Birmingham and Tolman's tax cuts may well reflect their values --

*   if they value breaking a promise to reduce a rate, in order to steal money from one group of taxpayers and give it, "progressively," to another group.

*   if they value breaking a promise to reduce a rate by instead increasing the same personal exemption they decreased last year, in violation of yet another promise.   Why should "working men and women" believe them now?

*   if they value continuing to steal from most savers and investors at a penalizing 12 percent rate.

*   if they value breaking a "temporary tax" promise in order to steal money from taxpayers who do not go to college in order to give a break to those who do. This tax break doesn't "make college more affordable"; it just keeps prices artificially high to please the education establishment.

*   if they value helping the federal government with its scam on Roth IRA's (give us your taxes now, and we PROMISE that "the earnings will not be taxed and distributions will be tax-exempt" later.  Hah!) Birmingham and Tolman must think that we taxpayers are really . . . easy.

To paraphrase that famous diner scene from Five Easy Pieces, in which Nicholson's Dupeau tries to order a plain omelet with tomatoes and a simple side-order of toast from a stubborn waitress who doesn't do substitutions:

"I'd like a tax rate cut, plain, in both earned and 'unearned'income, and the stabilization fund excess used to increase the personal exemption, the federal exclusion of capital gains from the sale of a principal residence, and a cup of coffee. Then all you have to do is hold the 'senior citizens only,' hold the tax dollar redistribution, no mayonnaise, no rhetoric, no scams, give us the surplus, and you haven't broken any promises."

We have a feeling that the "temporary tax" promise, like Dupeau's girlfriend, Rayette Dipesto, is going to be left behind at the gas station again.