Limited Taxation & Government
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CLT&G Update
Wednesday, July 15, 1998


To:  Members of the General Court
July 15, 1998
Re:  The Tax Package

The House Speaker and Senate President giveth, and the Speaker and President taketh away.

They agree on a package that will double the exemption for earned income, while at the same time increasing the "rainy day" fund and thereby taking away present and future increases in the personal exemption!

If the Legislature does nothing but allow the present "rainy day" fund law to work as promised, the tax cut will be bigger than if you pass this personal exemption increase. The Finneran/Birmingham change in the fund takes at least $475 million from working families, while the new double exemption gives back only $443 million.

As for the cut in the so-called "unearned" income tax rate, we voters can do that ourselves in November now that the COMFAST initiative petition is on the ballot.

So what's in the package for the working families whose income you've been taxing at 5.95 percent in violation of your promise?

There's an implied statement that you will never keep the promise, won't reduce the earned income rate even to the 5.7 percent as in the House version.

There's a long-overdue increase in personal exemptions that is canceled by the higher "rainy day" fund cap.

Then there's a cut in the "unearned" income tax rate that we can do ourselves in November.

Thanks, but no thanks. We hope you will reject this leadership agreement and insist on a cut in the wage and salary rate, the doubling of the personal exemption, the reduction in the investment income rate cut -- and the promised tax cut from the existing "rainy day" fund's giant surplus!

The House unanimously passed the Finneran/Birmingham "tax cut" package this afternoon by a vote or 149 - 0.

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