A PROMISE TO KEEP: 5%
A Ballot Committee of Citizens for Limited Taxation

 

Associated Press
Thursday, October 5, 2000

Cellucci, Grossman debate tax cut proposal
By John McElhenny


NEWTON, Mass. (AP) In the first of a series of debates on Gov. Paul Cellucci's bid to reduce the state income tax, challenger Steve Grossman said the cut would allow the average Massachusetts family to buy a submarine sandwich each week but not a side order of potato chips.

"I support tax cuts, but this would give the average working family 60 cents a day, or $4.60 a week," Grossman said. "The governor's plan makes no sense whatsoever."

Grossman, an envelope company executive and former Democratic National Party chairman, went head-to-head with Cellucci Wednesday night in a debate broadcast live by New England Cable News. Grossman is also a candidate for the 2002 governor's race.

The debate was the first in a series Cellucci is set to hold with a variety of state politicians on a proposed tax cut that will be on the state's November ballot. The state income tax would be cut from 5.85 percent to 5 percent.

Cellucci, the proposal's most visible and outspoken supporter, said Grossman was using "fuzzy math."

"If you have a teacher and a plumber, married with two kids, that family would save over $400," Cellucci said. "Why not trust that family to spend their own money?"

In the contentious half-hour debate, marked by interruptions by both men, Grossman said the tax cut would only benefit the wealthy.

A recent study by the Tax Equity Alliance of Massachusetts, which opposes the cut, said the top 1 percent of taxpayers would save more than the bottom 60 percent combined, if the cut were passed.

Cellucci insisted all taxpayers especially the middle class will benefit from the cut.

Supporters say the tax cut would save a family of four making $60,000 between $450 and $500 per year money that could be tucked away to help pay for college or heating bills.

Opponents say the cut would save only about $220 per year. They say the more than $1 billion the tax cut would cost the state each year would hurt spending in other areas such as education and health care.

Tax cut proponents say another principle is at stake too: honesty.

The Legislature approved the tax increase during the fiscal crisis of the late 1980s, with a pledge to scale the rate back to 5 percent when the crisis ended.

But tax cut opponents say since then, dozens of tax cuts have been implemented that are more fair than a reduction in the income tax.

The Massachusetts Taxpayer Foundation, a business-backed watchdog group, issued an economic analysis Monday showing the state could afford the tax cut as long as it continues to enjoy revenue growth and slows spending.

"Of course it's affordable if you don't want to make investments in education, to reduce class size, if you don't want to pay down the debt, and if you don't think it's important to pay for senior pharmacy and to protect public hospital and nursing homes," Tax Equity Alliance of Massachusetts spokesman Jack McCarthy said.

The MTF estimated the tax cut, when fully implemented, would reduce the state's tax revenues by $1.04 billion per year. The state Department of Revenue estimated it would cost $1.2 billion.

In the past fiscal year, which ended June 30, the state's total revenue was $15.6 billion.

If the cut were passed, it would drop the current 5.85 percent state income tax to 5.6 percent in 2001, 5.3 percent in 2002, and 5 percent in 2003.

Under current law, the income tax will drop from 5.85 percent to 5.8 percent in 2001 and 5.75 percent in 2002.

The tax cut will be Question 4 on the November ballot.

Cellucci, a Republican, also has tax-cut debates scheduled with state Treasurer Shannon O'Brien on Oct. 12, Speaker of the House Thomas Finneran on Oct. 21, and Senate President Thomas Birmingham on Oct. 30.

Grossman, O'Brien, Finneran and Birmingham are Democrats.


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