Here we go again into the height of the budget season with the Massachusetts
Legislature preparing to break more promises.
Senate President Tom Birmingham is not just planting his feet in concrete against
Gov. Paul Cellucci's call for a return to the 5 percent income tax rate. Birmingham and
his followers won't even accept the small step the House wants to take to lower the rate
from 5.95 percent to 5.75 percent.
Not that the House budget deserves a gold star. Like the Senate, the House wants
to keep a capital gains tax on the sale of long-term assets, this time with a 2 percent
rate.
In our high-cost state, a risk-taking entrepreneurial culture is the foundation of
whatever prosperity we enjoy. Risk must be rewarded, and that's why the Legislature agreed
five years ago to phase out the capital gains tax. Nothing has changed to justify what
Cellucci rightly calls "pulling the rug" out from under investors who've put
major sums into Massachusetts on th assumption that the Legislature would keep its
promise to drop the capital gains rate to zero.
But the Legislature is used to breaking promises. When the income tax rate was
raised from 5 percent to 5.95 percent a decade ago, the taxpayers were promised that it
was a "temporary" measure.
The Legislature is not against a few tax cuts, you understand - just as long as
they can be used to reward favored voters.
There is no end to the dreaming up of such favors for (just to mention some others
favored by the Senate and the House) renters, indebted students, people caring for elderly
parents and elderly low-income homeowners. It's a far better aid to extending the economic
expansion to let all earners keep more of what they earn.
Cellucci, who vows a veto of the capital gains provision, plans to lead a ballot
fight in 2000 to force through a 5 percent income tax rate. It can't come soon enough.