GOODBYE, TAXACHUSETTS

September 7, 2006

Two of the three Democratic candidates for Massachusetts governor have endorsed cutting the state flat-rate income tax, an unlikely scenario in a state where Democrats outnumber Republicans five to one, says the Wall Street Journal.

But perhaps liberal Northeasterners aren't as fond of high taxes as their political leaders assert, says the Journal:

  • Some 57 percent of Democratic primary voters support the current tax relief plan.
  • In 2000, despite heavy opposition from the Boston media and lobbyists, 59 percent of Massachusetts voters approved a ballot initiative to cut the income tax rate to 5 percent, from 5.85 percent.

And Massachusetts is not alone in the Northeast:

  • Earlier this year, the heavily Democratic legislature in Rhode Island chopped its top income tax rate nearly in half as part of a plan to lure departed jobs and workers back to the state.
  • New Jersey is in the middle of a property tax revolt.

But unlike other states, this year's tax fight in Massachusetts has erupted because the state legislature has ignored the will of the electorate for years, says the Journal:

  • In 2002, politicians froze the income tax rate at 5.3 percent, with the excuse that it was required to make up for falling tax revenues and that it would be only "temporary."
  • But tax receipts have climbed again since 2003 -- to $18.4 billion from 14 billion, a 31 percent cash windfall.

And current Governor Mitt Romney says the state's $1 billion revenue surplus more than justifies the tax cut. "We'll either spend that money or give it back to the citizens," he says.

Source: Editorial, "Goodbye, Taxachusetts," Wall Street Journal, September 7, 2006

For text:

http://online.wsj.com/article/SB115758826429655841.html

 

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