The Boston Herald
Monday, September 23, 2002
A Boston Herald editorial
Question 1 merits a firm "No way"
Carla Howell, the Libertarian Party candidate for governor,
and her supporters have managed to put on the November ballot a proposal (Question 1) to end the Massachusetts
personal income tax. As tempting as the idea is, it would be a catastrophe for
the state.
Now assuming the Legislature didn't simply repeal the law (a
big assumption considering their recent behavior), surely it has no intention of cutting spending either. What could happen,
however, is the imposition of even more damaging taxes. (Howell pledges to veto any budget
above $14 billion, roughly what would be available without an income tax, but if lightning
should strike and she should be elected, such a veto would be overridden in the blink of an
eye.)
The income tax will bring in about $8.5 billion in the
current fiscal year, roughly 40 percent of what the state will spend. That sum is somewhat short of combined spending on
Medicaid and state aid to elementary and secondary education. But no Legislature would cut all state
programs by 40 percent or anything close to it, or all other programs by even more to
preserve these two.
So what about other taxes? The current sales tax (including
the levy on motor vehicle sales and restaurant meals) produces a bit less than half what the income tax produces. A 15
percent sales tax - if you could collect it - would theoretically yield
about what the 5.3 percent income tax and the 5 percent sales tax now yield. But you'd have to seal the borders
- a huge fraction of retail sales would otherwise flow to our neighbors.
Extending the tax to services and food and clothing might permit a lower rate, but the effect would be little
different - and you would be putting more of the burden on people least
able to bear it.
You'd still have to pay for schools (the courts probably
would make you), which would require mind-boggling property tax increases (forbidden by Proposition 2 anyway) in the
state's cities if you wanted to avoid this kind of crippling sales tax.
Pressure for a statewide property tax would be almost inevitable. This would severely depress property values.
No matter how you sketch the scenario or what taxes you
tinker with, the result is the same - hugely damaging shifts in tax burdens. You can't abolish the income tax at a stroke
without a plausible plan to replace the revenue, and Howell's $14 billion budget limit is totally
implausible.
We regret this, because the proposal will damage the cause
of realistic tax-cutting and spending restraint to which we have been committed for a long time. Voters should give a
firm "No" on Question 1.
Return to top
An edited version of the following
letter was published today in:
The Boston Herald
Tuesday, September 24, 2002
Letter to the Editor
Solons will defy us
Re: Boston Herald editorial, "Question 1 merits a firm 'No
way'" (Sept. 23)
In your editorial "Question 1 merits a firm 'No way'" (Sept.
23), you ultimately reject Carla Howell's income tax repeal ballot question "because the proposal will damage the cause of
realistic tax-cutting and spending restraint to which we have been committed for a long time."
While taxpayers appreciate the Herald's support, voters must
note the limited impact the Herald's stalwart advocacy for reasonable tax and spending policies has had lately because
of the Legislature's cavalier defiance of voter mandates.
This year the Legislature defied voters on three laws passed
with overwhelming support: it ignored the Clean Elections Law and overturned the charitable deduction and income tax
rollback mandates. One consequence of this defiance reportedly was its
contribution to the defeat last week of Finneran lieutenant Rep. Maryanne Lewis in her primary.
In 2000, along with the income tax rollback, voters
confronted another ballot question: to take some control over turnpike tolls. Convinced that adopting both questions was
"unreasonable," voters rejected the tolls question. On Beacon Hill this was interpreted as
"Hey, they like tolls so let's give'em some more," and a whopping increase was voters'
reward.
Taxpayers have no choice. If Question 1 is defeated by
voters who again think they're being "reasonable," they'll be inviting the slap of another "reward"
-- increased taxes. Pass Question 1, then let legislators defy yet another voter mandate
as they've vowed to do. Soon they'll hit critical mass; voters will respond to Beacon Hill defiance in growing numbers. Let's
see how many more Maryanne Lewis's must fall before voter-respect is reclaimed.
Chip Ford
Director of Operations
Citizens for Limited Taxation
Return to top
The Boston Herald
Monday, September 23, 2002
Eliminating income tax is right idea
by Cosmo Macero Jr.
If we could cross Dr. Jill Stein with Carla Howell, we might
just get somewhere on tax reform.
But put an M.D. from Harvard Medical School on a Green Party
platform for governor, and Phil Johnston's Democrats call her a wacko.
Carla Howell, meanwhile, is at risk of accomplishing the
impossible: She might just give tax cuts a bad name.
As it stands, Dr. Stein is no wacko. She's just wrong. But
not totally.
Whether you start at the bottom, at the top or in the middle
of the wage scale, any move toward erasing the income tax is headed the right way.
Stein, not surprisingly, would start at the bottom by
raising the income floor beneath which workers are exempt from state income tax. Can't argue with that.
The problem is, Stein's tax-cut agenda leads to old-fashioned wealth redistribution. She
wants to offload the income tax burden on upper-middle-class and wealthy taxpayers -
perhaps by phasing in a graduated (read: anti-rich) state income tax over time.
She starts off OK, but then veers badly into West Cambridge.
Howell, on the other hand, has the right idea.
The 16th Amendment to the U.S. Constitution, which authorized a federal income tax in
1909, has become a scourge on individual economic freedom - affording cash-addicted
congressmen incredible powers to seize the fruits of American labor.
And it is no less onerous on the state level.
Howell's ballot question to eliminate the state income tax -
and the campaign for governor she has built around it - shows more ideological courage than Republican Mitt Romney or
Democrat Shannon O'Brien will probably ever have.
Howell commendably wears her principles like a football
jersey: The income tax should be repealed, she says. No waffling. No hemming. No hawing.
And she's right.
Too bad her plan - as presented - is a recipe for destroying
the quality of life for many thousands of people across Massachusetts.
If Howell really thinks state government can absorb a 40
percent ($9 billion) cut to its $23 billion budget, she either thinks voters are all stupid, or she's delusional herself.
Forget government waste, patronage and no-show jobs. That kind of hit would gouge deeply
into critical services such as public safety, highway maintenance and public health.
I'll vote for this thing only on principle - comfortable in
knowing that the Legislature, having already eviscerated the referendum process, will never let the measure stand if it
passes.
So how do we reform the state tax system?
It's straightforward, but certainly not easy: Couple the
elimination of personal income taxes with a substantial increase and expansion of sales taxes.
Remember: What government does best - at every level - is to
provide a safe environment for economic prosperity, from national defense to fire protection and just keeping roads
functional and bridges standing. It's because of these and other critical functions of
government - from air-traffic control to snow removal - that taxes on economic transactions
where they are carried out make the most sense.
In a number of states - Arizona comes to mind - sales or
"transaction" taxes are levied at several points along the economic chain. Cities, counties and states each tax retail
sales, property transfers and other transactions.
Of course, Arizona has yet to eliminate its own income tax.
But it could. And so could Massachusetts, if lawmakers would
only recognize that sales taxes are not regressive (the standard liberal protest), since higher-income earners tend to
consume and spend more than low-wage earners.
Liberals can't stand it. Because they know you can't charge
a rich guy more tax on the same television set than a low-income guy. What they don't understand is that the rich guy
buys the flat-panel, 40-inch model with TiVo. And the blue-collar fellow opts for the 19-inch with
universal remote - happy as a clam that it's cable ready.
Everyone makes out, and the state gets its ... 15 percent.
That's right. That's my rough calculation on what it would
take to replace about $5 billion in annual state wage-earner income taxes (not counting interest and dividend income) -
added to the $3.8 billion in annual sales taxes that Massachusetts already collects.
This leaves corporate taxes untouched and, significantly,
retains the tax on income from interest and dividends - if only as a way to keep the sales tax at 15 percent. Hey, no system
is perfect.
Only one thing drives an idea like this: a genuine belief
that taxing the hard-fought incomes of American citizens is little more than a government-sanctioned criminal enterprise. I
believe it. I bet Carla Howell does, too.
And I haven't given up on Jill Stein, either. Because
there's a conservative inside every liberal, just wishing they could get out...
Return to top