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Sales tax reduction question weighs on gubernatorial candidates

Some say rate of 3 percent too low

By Steve LeBlanc
Associated Press / February 15, 2010

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When Massachusetts residents cast their ballots for governor in November, they will probably face another decision in the voting booth - whether to lower the state sales tax rate from 6.25 percent to 3 percent.

It’s a question that is making those running for the state’s top political office nervous.

Of the six declared candidates for governor, only one - Republican convenience store magnate Christy Mihos - has endorsed the question. The others say they favor lowering the sales tax, but preferably to 5 percent, not 3 percent.

“I suspect that given people’s attitudes right now, it has a good chance of passing,’’ said state Treasurer Tim Cahill, who is running as an independent candidate.

Cahill said cutting the sales tax so dramatically would limit options for other tax cuts he would like to push, including cuts to capital gains, personal income, and corporate taxes.

Republican Charles Baker is staking out the same position. “Charlie is committed to implementing the will of voters should a 3 percent rollback pass,’’ said Baker campaign manager Lenny Alcivar.

The only candidate who actively supports cutting the sales tax to 3 percent is Mihos, who said it would put an average $689 back into the pockets of Massachusetts shoppers each year. “It’s a stimulus for the rest of us,’’ he said.

Mihos conceded that the sales tax cut would be a big hit to the state’s coffers - about $2 billion a year at a time when Massachusetts is still struggling to rebound from the lingering economic fallout of the recession.

Governor Deval Patrick is in a stickier position. Although he didn’t propose the increase, the Democratic incumbent signed the state budget that included the sales tax hike. A spokesman said Patrick favors rolling back the sales tax once the economy rebounds, but opposes cutting it to 3 percent.

“He understands the burdens on and concerns of working families, and shares their commitment to fund our public schools, local public safety services, and health care,’’ said Alex Goldstein, press secretary for Patrick’s campaign. “Cutting the sales tax to 3 percent would mean gutting support for these critical services.’’ Goldstein said the loss of revenue also would drive up property taxes.

Community organizer Grace Ross, who is challenging Patrick for the Democratic nomination, said she opposed raising the sales tax to 6.25 percent because she said it disproportionately hurts people who work for a living and spend what they earn. But Ross also said 3 percent is too low. And Green-Rainbow candidate Jill Stein said she also backs reducing the sales tax rate to 5 percent and possibly lower - as long as the wealthier pay more.