Massachusetts to vote on abolishing income tax
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.
• Oregon, which now allows up to $5,600 in federal income taxes to be deducted on state tax returns, has a measure to remove the cap.
• Arizona has an initiative that would prohibit new taxes on the sale or transfer of property.
Massachusetts' ballot question comes at a time when the state's fiscal outlook already is bleak, officials say. Gov. Deval Patrick says an estimated $1.4 billion gap in the state's budget this fiscal year will force cuts in universal pre-kindergarten education, Medicaid and other services. Abolishing the income tax offers the prospect of far sharper cuts.
"You can't cut $12 billion out of state government and still expect to provide good schools … health care, all the things that become increasingly important to people during an economic downturn," says Cyndi Roy, spokeswoman for the state's Executive Office for Administration and Finance.
No longer 'Taxachusetts?'
Massachusetts once had such hefty taxes that it was commonly dubbed "Taxachusetts." During the late 1970s and early 1980s, it had one of the highest state and local tax burdens in the nation.
The label no longer fits, tax experts say. This year Massachusetts' combined state and local tax burden ranked 23rd among the states, according to the Tax Foundation.
Massachusetts voters have considered abolishing the state income tax before. Such an initiative nearly passed in 2002, winning about 45% of the vote. A late September poll by Suffolk University and TheBoston Globe on this year's ballot question found 40% favored abolishing the tax; 49% were opposed.
Clare Kelly, 24, a volunteer calling voters to urge them to keep the income tax, says those she spoke to didn't need much convincing. "Some people have said, 'It would be great to not pay taxes, but come on, it's not realistic,' " she says.
Harris Gruman, campaign director for the Coalition for Our Communities, which is leading the fight against the measure, says he knows firsthand how critical it is for the state to have the revenue to help residents in need. When his ailing father was in a nursing home and no longer able to pay the $10,000-a-month bill, the state picked up the tab.
"I think the people who put this on the ballot weren't thinking about what many middle-class people are going through," says Gruman, a father of two who says he couldn't afford his father's care. "It's great to live in a state where those services are provided."
Passion is also strong on the other side of the issue. Citing the nation's economic crisis, Howell, a former Libertarian candidate for governor, says "it's an even better year for ending the income tax. High taxes and wasteful government spending hurt the economy … and make it harder for families to take care of themselves in hard times."
One of those helping Howell, retiree John Madfis of Newton, accuses opponents of using "scare tactics" that predict cuts to services for "the elderly, the needy, the schools. But never do they bring up toll takers making $70,000 to $100,000 a year."
As Madfis and another volunteer, Harold Wolfe, pass out handbills in front of a Super Stop and Shop market in Framingham, Chris Faherty takes one, then asks a few questions.
"I'm all for getting money back from the government, but I'm very leery about what happens to the infrastructure when you do something like that," says Faherty, 48, a middle school chef. "I want my roads to get plowed."