A Ballot Committee of Citizens for Limited Taxation


The Boston Globe
May 21, 1991

Tax hike of $845M is urged
Coalition seeks to counter cuts

By M.E. Malone
Globe Staff

Blasting the House Democratic leadership for caving in to Gov. Weld's "no new taxes" stance, a group that helped defeat a tax-rollback petition on the ballot last year recommended yesterday that taxes be increased by $845 million.

The group argued that tax increases are needed to offset some of the nearly $2 billion in budget cuts due to be debated in the House this week.

"There are no Democrats in there," said Kip Tiernan, founder of the women's shelter, Rosie's Place, as she pointed to the State House. "The Democrats are all out here."

Yesterday's gathering on the State House steps, organized by the Tax Equity Alliance of Massachusetts and the Massachusetts Human Services Coalition, was held to offer an alternative to the $12.8 billion spending plan proposed last week by the House Ways and Means Committee that is balanced almost exclusively by cutting programs and services the state has provided for years.

Instead, the group argued, the state should, among other things, raise the sales tax from 5 to 6 percent, keep the income tax at this year's rate of 6.25 percent next year instead of rolling it back to 5.95 percent as scheduled, and end a series of tax exemptions that primarily benefit the wealthy.

James Braude, executive director of TEAM, said yesterday he has legislative sponsors for some of his tax initiatives and intends to have backers for each separate proposal before debate begins in the House.

"It's time for the Democratic majority in the Legislature to act like Democrats," Braude said. "Bill Weld was elected governor, not dictator."

Despite the decidedly antitax mood on Beacon Hill, Braude believes the coaliton will meet with some success on the House floor as members realize the extent of the cuts proposed by their leadership through the Ways and Means Committee.

For example, the state could collect an additional $100 million annually if it would stop the current practice of allowing those who earn capital gains to deduct 50 percent of the gain from their taxes when those gains exceed $20,000 in one year. Under Braude's plan, gains from the sale of a primary home would continue to be exempt.

That $100 million, he argued, would free up $87 million to fully fund a rental assistance program due to be cut, eliminate the need to cut from $150 to $115 the annual clothing allowance for children on welfare, and restore $11.8 million for transportation for the mentally retarded.

The group's proposal also calls for the state to:

  • Change its gift tax law to mirror the federal law so that all gifts of more than $10,000 a year would be taxed.

  • Eliminate the exemption from the sales tax for gold and other precious metals worth more than $1,000.

  • Extend the sales tax to landscaping, legal, accounting, architectural and engineering services, although the Legislature recently rescinded a law that would have done just that.

  • Increase the excise tax on cigarettes and alcohol.

Together, the tax changes would raise an additional $880 million next year above the $8.3 billion officials hope to raise through existing taxes.

Braude's group would add two exemptions to the tax code -- a sales tax credit for the lowest income earners and a 50 percent deduction on unemployment benefits -- bringing the net revenue gained under the plan down to $845 million.

House Speaker Charles Flaherty (D-Cambridge) said last week he is unlikely to support tax increases introduced on the House floor during debate because Weld is expected to veto any tax increase proposals that appear on his desk.

Senate President William Bulger (D-South Boston) indicated in a recent television interview that tax increases may have to be part of the mix.

Barbara Anderson, executive director of Citizens for Limited Taxation, sparred with Braude on a number of occasions last year over CLT's proposed tax-rollback petition on the November ballot. "When we were debating Jim Braude last year, I would ask him, 'Jim, what taxes are you going to raise next year?' and he would respond that he would not support a tax increase," Anderson said yesterday.

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