Massachusetts to vote on abolishing income tax

ByABC News
October 28, 2008, 9:01 PM

BOSTON -- A dueling barrage of bumper stickers, yard signs and phone calls is raining down on the people of Massachusetts, giving the pros and cons of a ballot measure that would do away with the state's income tax.

If voters approve Question 1 on Tuesday, both sides agree, its impact will reverberate from the state treasury to the bank accounts of the working class. Abolishing the income tax could strip the state of $12 billion or more a year nearly half its $28 billion budget, experts say.

"We've never seen a tax elimination that would have that effect," says David Brunori, a public policy professor at George Washington University. Only California's Proposition 13, a sweeping 1978 initiative that limited property taxes, came close, he says. "You're looking at Draconian cuts to public services."

The initiative would cut the state income tax, currently at 5.3%, in half on Jan. 1 and eliminate it a year later, allowing an average taxpayer to pocket an additional $3,700 a year, supporters say.

"That's money that workers can save, spend, invest or give away as they see fit in their own communities," says Carla Howell, chairwoman of the Committee For Small Government, which backs the measure.

Massachusetts would join nine other states that have no income tax Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, says the Tax Foundation, a non-partisan group that monitors fiscal policy.

Other states consider tax moves

Massachusetts may have the most sweeping anti-tax issue at stake next month, but voters in other states also will weigh in on taxes, according to the National Conference of State Legislatures:

North Dakota has a ballot measure that would cut most state income tax rates in half and reduce corporate income tax rates by 15%.

Maine will ask residents whether they want to reject recent legislation that requires insurers to pay a surcharge on some claims, raises taxes for large producers of malt liquor and wine and puts new taxes on soda.