Oct 302008
Ballot Question 1: A YES vote would reduce the state personal income tax rate to 2.65% for the tax year beginning on January 1, 2009, and would eliminate the tax for all tax years beginning on or after January 1, 2010.

I know, I know. I hate paying income tax, too. I dislike government waste, too. It would be nice to have a little extra money in my pocket. It would be nice to see the state get leaner. In a world full of magical money fairies that preserved essential state programs in the absence of revenue, the Question 1 proposal might be a good idea. But there are no magical money fairies, and the only rational vote in response to question 1 is No.

I freely admit that I don’t dislike taxes as much as the next guy might. The State provides me services that protect my meager wealth and support my standard of living. Accordingly, I favor the support of those services through fair taxation and fiscal responsibility. However, virtually every state in the nation, in addition to programs that support the public good, also funds programs that do little more than support public servants. Massachusetts, like any other state, is beset by waste, corruption, and appalling incompetence. Perhaps if we put the state on a starvation diet by squeezing off one of its chief revenue sources, it would force the government to trim unnecessary programs and waste.


But you, and I, and anyone who has ever encountered government in any of its forms, know that’s not going to happen. Oh, there may be some trimming here, some squeezing there, but the deep cut, the major restructuring, is not going to happen. What’s going to happen instead is a restructuring of the tax system. Money that used to flow into state and community coffers from the income tax system will now be obtained via increased sales and property taxes.

“Higher sales taxes don’t matter,” you say, “I’ll just drive up to New Hampshire to shop.” And maybe you will, but that’s not an option for everyone. Those who do their shopping in-state will end up paying more for less. Retailers will either have to cut prices to compensate, or just accept reduced sales. More people go out of state to shop, and those who stay will have reduced purchasing power.

“Property taxes don’t matter,” you say, “I rent, anyway.” But somebody owns the property you lease, and when their taxes go up, so will your monthly rent. The heightened cost of ownership will drive some people to sell their property, increasing demand in the rental market and driving up prices that way. And even if your landlord doesn’t hike your rate, the squeeze means something, be it maintenance, landscaping, or snow removal, will have to go. Moreover, the higher property taxes will be passed along to Massachusetts businesses that own or rent their stores. Higher prices or staffing cuts will follow.

The government of Massachusetts could and perhaps should be smaller. The tax burden of state citizens should perhaps also be lower. Getting there by eliminating the income tax, however, is akin to trying to lose weight by cutting off your legs. Precipitous, intemperate action of this kind will only raise the cost of living in Massachusetts, while adversely affecting the economy and standard of life. No matter how much you hate taxes, the only responsible vote on Question 1 is “No”.