Mass. Considers Nixing State Income Tax

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Published August 30, 2002

| FoxNews.com

Almost 230 years after dumping tea in Boston Harbor to protest British taxes, Bay Staters still seem to have a rebellious edge when it comes to resisting government largesse.

Activists in Massachusetts this year have managed to put a referendum on the November ballot that would allow citizens to eliminate the income tax -- taking $9 billion each year out of government coffers and leaving lawmakers to plug in the holes.

Whether the measure will pass is not clear. A Boston Globe poll earlier this summer showed 39 percent of voters support the move, while 49 percent oppose it and the remainder had yet to make up their minds.

"We think smaller government would benefit the state in numerous ways. We're taking our case directly to the voters," said Michael Cloud, who on behalf of the Committee for Small Government raised the $500,000 necessary to launch the initiative last year.

Cloud and supporters gathered the necessary 120,000 signatures to get on the Nov. 5 ballot, much to the chagrin of both Democrats and Republicans in the state Assembly who say eliminating the tax would be a disaster.

"I wouldn't be terribly surprised if it wins," said Cloud, who is running for U.S. senator as a Libertarian against incumbent Sen. John Kerry, a Democrat.

"It would be the end of fiscal sanity and the start of fiscal Darwinism," charged Democratic State Senator Mark C. Montigny, chairman of the Ways and Means Committee. "It's not based in reality -- it's a cheap, political thrill."

Michael Widmer, president of the Massachusetts Taxpayers Foundation that opposes the initiative, said eliminating $9 billion from the state's $23 billion annual budget would signal "a period of dramatic, unprecedented political and fiscal chaos in the state," resulting in the end of public education as state residents know it and the loss of prescription drug benefits for 1 million poor elderly citizens.

"I appreciate the hyperbole," said Cloud, who dismissed Widmer's group as representing "businesses that do business for the government. These guys are living off it."

As for claims that lost revenues would create fiscal anarchy, Libertarian gubernatorial candidate Carla Howell said there is so much misinformation out there that they had to take out a full-page ad in The Globe this week to break it down for voters.

"It's getting people thinking and looking at state spending at an unprecedented depth," said Howell, whose popular message garnered her 308,000 votes against Democratic Sen. Ted Kennedy in 2000.

Howell argued that eliminating the 5.3 percent tax rate would give back $3,000 to each of Massachusetts' three million workers every year, create 300,000 new jobs and force the state legislature to hold the line on spending. It would also keep people from moving over to neighboring states where the taxes are less of a burden.

The average Massachusetts resident paid an average of $1,301 in personal income taxes in 1999, according to U.S. Census figures, compared to the national average of $633.

But Widmer and Montigny say the state budget has already undergone painful cuts in the last year. The tax rate was cut from 5.9 percent since a ballot initiative was passed demanding it be trimmed in 2000.

"There is no question that we have made tremendous and painful cuts," said Montigny. "Yes, there are some good questions coming from all sides. But this one, to arbitrarily cut the budget without any solution for funding core government functions, it's ridiculous."

Montigny said the state constitution mandates the commonwealth provide education funding beyond local property taxes, and that other funding mechanisms would have to be found to make up for the loss of income tax revenues. In order to do that, some believe, the state will try to repeal the measure if it passes.

But initiative supporters are unfazed.

"These guys would face a riot," said Cloud.

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