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Globe Editorial

Question 1 = property tax hike

October 12, 2008
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PROPONENTS of Question 1, the ballot measure to repeal the state income tax, may have convinced themselves that they don't benefit from state services. But even they would have to admit the need for basic town services such as police, schools, sewers, and libraries. Voters who want to protect their homes and schools as well as their wallets ought to oppose the measure.

Question 1 supporters promise taxpayers an average annual savings of $3,700 by eliminating the state's 5.3 percent income tax. A sober report by the Massachusetts Taxpayers Foundation exposes this fool's paradise. The report shows that supporters of the initiative overstate the average annual savings by about $3,000 for the 65 percent of taxpayers who earn $50,000 or less. The wealthy make out fine, as usual. The 14 percent of tax filers with incomes over $100,000 would save an average $16,295, according to the report.

Meanwhile, passage of Question 1 could impoverish towns and create pressure on residents to make up the difference at the local level, just as they do in the nine states that now forgo income taxes. Lawmakers and the governor can't slice Medicaid and other federal or legal obligations if faced with the need to cut $12.5 billion out of a $32 billion state budget, as Question 1 requires. It must come instead from discretionary accounts, such as local aid, that make life better for everyone.

The effect on local government would be devastating. Consider Saugus, a hardworking, middle-class town of about 27,000 that could stand in for scores of communities in Massachusetts. In 2002, a narrow majority of Saugus voters said "yes" to a similar statewide income tax repeal effort. It didn't pass, and lucky it was for Saugus and other communities that are already struggling to provide basic services.

Saugus receives about $9 million in state aid for its schools and city services. Residents could likely kiss more than $7 million of it goodbye if the repeal is approved by voters on Nov. 4. And Saugus, like most towns, isn't a community with a lot of fat. It would take an immediate increase of $540 on top of the average $3,400 property tax bill in Saugus just to stay even, according to the business-backed Taxpayers Foundation. Saugus voters like those in hundreds of other communities could either choose to override the Proposition 2 1/2 law that limits property taxes or do nothing while the town becomes a place where few would want to live, start a business, or educate their family.

Even a couple of thousand dollars for higher-income voters looks like a bad deal if measured against potential private school tuitions, home security systems, falling home values, and other costs of living in a community in decline.

It doesn't stop at higher property taxes. The Taxpayers Foundation report shows that states without income taxes, including Florida, Tennessee, and Washington, rank near the top of the nation in sales tax burden. Massachusetts ranks 45th. Sky-high sales taxes on meals and services, such as software and entertainment, become a substitute for the income tax. And a regressive one, too. Washington state, with a population similar to that of Massachusetts, collects double what residents of this state pay in sales taxes.

People are nervous and angry about the troubled economy. The temptation may be strong to send a message to politicians, even state and local ones with no connection to the mess on Wall Street. But repealing the state income tax is not the way to go. And it shouldn't even require an appeal to the common good to see it. Question 1, if passed, would hit hardest right where voters rest their heads.

BALLOT QUESTION 1
For and against...

For and against...

The arguments for and against eliminating state income tax.
INTERACTIVE

Play the budget game

If Question 1 passes the governor and legislature will need to cut nearly 40% of the state's budget. How would you do it?
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