Date: Tue, 31 Jul 2001 10:02:38 -0700
From: Tavares@alum.mit.edu ("JJacoby")
Subject: [lpaz-repost] A new tax revolt? / 7-31-2001
To: lpaz-repost@yahoogroups.com
WIPE OUT THE INCOME TAX?
By Jeff Jacoby
The Boston Globe
July 31, 2001
Today, taking the first step toward what could be the most momentous
ballot fight in Massachusetts history, a group of small-government
activists led by two-time Libertarian Party candidate Carla Howell will
file an initiative petition to abolish the state's personal income tax. If
the attorney general approves the language of the proposed law, and if the
petitioners collect the necessary signatures from registered voters, the
measure will be on the state ballot in 2002.
Fasten your seat belts. We may be in for a wild ride.
Bay Staters are used to voting on tax changes. In 1990, they rejected
Question 3, which would have cut the individual income tax rate, newly
hiked to 6.25 percent, back to 5 percent. In 1994, they defeated Questions
6 and 7, which would have replaced the state's uniform tax rate with
graduated rates rising to 9.8 percent. They agreed in 1998 to stop taxing
investment income more heavily than regular income. And last year, by a
59-41 landslide, they passed the tax cut they had disdained in 1990 and
sent the income tax rate rolling back to 5 percent.
Most of those initiatives inspired considerable debate. They were
ardently defended and vehemently denounced in every conceivable forum. But
we will look back on those campaigns as prissy tea parties next to the war
that will erupt if this newest initiative makes it to the ballot.
If Massachusetts voters get a chance to abolish the income tax, there
will be a din the likes of which this state has never known. Every special
interest with its snout in the public trough -- and every politician and
media outlet that supports them -- will howl with fury, warning that an end
to the income tax will mean an end to civilization as we know it. The
schools will shut down, they ill moan. The sick will die. The courts
will collapse. Bridges will buckle, the unemployed will go hungry, the T
will grind to a halt, and every city and town in the commonwealth will sink
into fiscal chaos.
They will say, in short, that the loss of its income tax will leave
Massachusetts starved and disgraced. How can Carla Howell possibly defend
*that?*
Howell is the articulate and telegenic Libertarian who challenged Ted
Kennedy in the US Senate race last year and drew 12 percent of the vote,
nearly tying the Republican candidate, who got 13 percent. It was a
notable achievement for a 3d-party candidate, especially one whose
philosophy of minimal government flies in the face of everything that
liberal Taxachusetts is supposed to favor.
Still, 12 percent is only 12 percent. Massachusetts voters may have
cut their taxes last November and voted Republican in the last three
gubernatorial elections, but it isn't exactly obvious that they want to
radically shrink state government. Howell and others who advocate an end
to the income tax will be fighting an uphill battle. Voters will be
skeptical. Opponents will be well-funded. Democratic politicians -- and
Republican ones, too -- will rush to defend the status quo. The media will
trumpet the horrors awaiting Massachusetts if the income tax goes by the
boards. It won't be an easy sell.
Even for those of us who consider taxation little better than legalized
theft, there is no denying that wiping out the income tax would take its
toll on state government. In 2000, the income tax generated more than $9
billion for the treasury -- 57 percent of the state's total tax revenue of
$15.7 billion. It funded almost 41 percent of the state's $22 billion
operating budget. Critics will demand to know how Massachusetts could
survive without it. Will Howell have an answer?
Of course she will.
For a start, she can point out that seven states already manage without an
income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and
Wyoming. Two others, New Hampshire and Tennessee, tax only dividends and
interest. Beacon Hill may be addicted to income-tax revenues, but
addictions aren't healthy. And as countless ex-smokers, ex-gamblers, and
ex-drinkers can testify, it is a blessing to overcome them.
No doubt Howell will make the point that state government spends so
much money because it has it, not because it needs it. The dollars gush
in, so many in recent years that the state literally hasn't been able to
spend them fast enough: Even with a budget racing far ahead of inflation,
Beacon Hill keeps winding up with nine- and 10-figure surpluses. And that
doesn't count the billions stashed away, unused, in various rainy day and
insurance funds. Or the state's $7 billion share of the tobacco settlement.
Deleting the income tax from the state's fiscal calculations would not
roll us back to the 19th century. It would roll us back to 1991. Do the
math: Subtract $9 billion of income tax revenues from this year's $22
billion budget and you ar left with $13 billion. That was roughly the
size of the state's budget (in 1991 dollars) when Michael Dukakis left
office. Many things have been said of Dukakis, but no one ever accused him
of cutting government to the bone. At $13 billion, state government was
big, powerful, intrusive, and top-heavy with needless boards and
bureaucrats. Restored to $13 billion, it would still be far from Spartan.
But it will certainly be smaller. And that, say Howell and her fellow
petitioners -- who are organized as the Committee for Small Government --
is the point.
"Making state government small will make people's lives better and
happier," she told me yesterday. "$9 billion less for the state means $9
billion more for voters to spend on *their* priorities: their kids'
education, their churches, their retirement. It means $9 billion more for
the Massachusetts economy -- and that means new businesses, new
opportunities, new jobs."
Ready or not, the mother of all ballot fights is about to begin.
Better buckle up.
-- ## --
Faced with the pain of freedom, man begs for his shackles.
--GERRY SPENCE
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