At Cradle of Liberty, activists rally around antitax message

More than 250 activists rallied at Faneuil Hall yesterday, hoping to build support for a proposal on the November ballot that would abolish the state income tax.

Supporters of Question 1, which would eliminate the 5.3 percent tax, denounced government spending as wasteful and said the national financial crisis and slumping economy make it increasingly important to ease the burden on taxpayers.

"I'd rather see the people keep their money than sending it to Beacon Hill," said Gerry Cardillo, 62, of Easton. "State spending is out of control."

Critics of the proposal said eliminating the tax would create a fiscal disaster and force drastic cuts to state services.

"It's no exaggeration to say it would have devastating consequences," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog group. "The scale of the lost revenue, and the cuts that would ensue, are breathtaking."

If approved, the ballot measure would reduce tax collections by an estimated $12.5 billion, or about 40 percent of the budget, while saving the average taxpayer about $3,700 a year.

The activists are waging their campaign as the state is already tightening its belt. Governor Deval Patrick said Thursday that Massachusetts would have to make substantial budget cuts because of lagging tax collections amid the ongoing financial crisis.

Yet people at the rally, including one man who held a sign that proclaimed "Bail Out Mass. Taxpayers," said they were far more concerned about their own budgets.

"In this economy, everybody's tight," said Ben Maitland-Lewis, 25, a small business owner from Brighton. Led by the Committee for Small Government, the campaign faces strong opposition from education groups, unions, and many business and political leaders, who say the measure is fiscally reckless.

Carla Howell, the committee's chairwoman and a former Libertarian gubernatorial candidate, said the tax cut would leave the state with $35 billion, and that the state could cope by streamlining operations and reducing waste. Howell said ending the income tax would also jump-start the economy, create jobs, and make the state "a magnet" for families and businesses.

While Howell and other speakers whipped up the crowd inside Faneuil Hall, supporters outside distributed T-shirts and bumper stickers to passersby, urging them to lobby for the measure in the next few weeks by contacting their friends and family.

Some in the crowd were torn. Dan Goldstein, 35, a physician's assistant from Natick, said he worried that the measure would lead to cutbacks that could threaten his brother's job as a public schoolteacher. At the same time, he said, taxpayers deserve a break.

"I know there's a lot of mismanagement, but I haven't made up my mind yet," he said.

The measure calls for cutting the tax rate in half next year and abolishing it the following year. It would also end the tax on interest and dividends for those living on an annuity, and end a capital gains tax on house, business, and stock sales.

Nine other states have no income tax - Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington, and Wyoming, according to the Internal Revenue Service.

In 2002, a similar ballot measure gained 45 percent of the vote, a level of support that stunned many political observers.

The Massachusetts Taxpayers Foundation will release a study tomorrow that concludes that Question 1 would result in 70 percent budget cuts for the bulk of state government, including human services, environmental programs, prisons, courts, colleges and universities, and aid to cities and towns, Widmer said.

But yesterday, many said they believed the measure had a solid chance of passing. Many voters, they said, are struggling financially and are angry at a state government they consider unresponsive to their concerns.

Near the end of her speech, Howell waved a state tax form in the air, then to loud applause lowered it slowly into a shredder on the stage. When the shredder didn't work, the audience called out for her to tear it up herself. She did, pausing for dramatic effect between rips.