Massachusetts State Income Tax Repeal Initiative

The State Income Tax Repeal, also known as Massachusetts Question 1, was one of the 2008 ballot measures that appeared on the November 4, 2008 ballot in the U.S. state of Massachusetts.[1] Voters were asked whether or not they approved of the proposed measure which, if it had passed, would have ended the 5.3% income tax in Massachusetts on wages, interest, dividends and capital gains. Ultimately, Massachusetts voters defeated Question 1 by a wide margin, with approximately 70% opposed versus 30% in favor.

Specific provisions

This proposed law would have had the following features:

  • Reduction of the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009.
  • Elimination of the tax for all tax years beginning on or after January 1, 2010.
  • The personal income tax to which the initiative would have applied would have been the 'income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of "S corporations" as defined under federal tax law.'
  • The proposed law would not have affected the tax due on income or gain realized in a tax year beginning before January 1, 2009.
  • The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect.

Supporters of the income tax repeal

The official proponent of the measure was the Committee for Small Government. Michael Cloud and Carla Howell led the committee.[2]

Initiative supporter Michael Cloud believed that the measure would lower the budget from about $28 billion to $17 billion, which is approximately the size of the 1995 state budget.[3]

Polling showed that 46 percent of those asked supported the measure before hearing any of its details, and 40 percent still supported it after hearing about the measure in depth.[4][5]

Arguments that were presented in support of Question 1

  • Total state government spending is in excess of $47.3 billion. Total state revenues are in excess of $47.3 billion. The income tax is less than 27% of the state government's revenue.
  • Municipal (city and town) government spending is more than $22 billion on top of state government spending, bringing total government spending in Massachusetts to nearly $70 billion. The income tax is only 17% of total government spending.
  • Waste, fraud and abuse as exposed in the media nearly every day are only the tip of the garbage heap; when polled, voters estimated government waste at 41%. An informal poll of government employees estimated waste at 50%.
  • State politicians have not kept faith with their promises to taxpayers. The Massachusetts State Legislature blockaded a ballot question approved by the citizens of the commonwealth in 2000 that would have reduced the state income tax to 5%.
  • 3.4 million Massachusetts taxpayers would get back an average of $3,700 each annually.
  • People would find the Bay State a more attractive place to live, work, invest, and raise families.
  • From 1991-2007 more than 550,000 people moved out of Massachusetts, ranking the commonwealth as the 2nd worst state in the US in terms of population loss.

Funding

According to campaign finance reports, as of November 1, 2008 the Committee for Small Government had raised approximately $385,000 since creation and had $14,131.72 cash left. They also had about $80,000 in outstanding liabilities.[6]

As of August 15, 2008, Ms Howell and Mr Cloud had paid themselves almost $200,000 from committee donations for "consulting fees" over the previous 6 years for services rendered to their own campaigns while soliciting donors for additional contributions because the campaign was out of funds.[7][8][9]

Earlier attempt to repeal income tax

The Committee for Small Government advanced a similar initiative, called the Massachusetts End the Income Tax initiative, in 2002. That measure did not pass and received 885,683 votes, or 45.3 percent.[10]

Individual Support

The Republican senatorial candidate, Jeff Beatty, said that he supported Question 1 while challenging incumbent-John Kerry.

Editorial Support

Stephen Moore of the Wall Street Journal stated: "The forces of the tax-and-spend status quo will descend on this initiative like British troops after the original Boston tea party, but somebody has to make an effort to stop the relentless growth of government."

Steve Forbes of Forbes magazine stated: "This is an attack on political establishments there and throughout the U.S. that routinely put their own interests above those of their constituents: lavish government pensions with payouts that would bankrupt private companies; resistance to genuine reform in Medicaid spending, which has become the biggest item on virtually every state's budget; ever more pork-barrel spending; and ever more obsequiousness to rapacious special interests. Bay State voters – go for Proposition 1."

Opposition

Funding

According to campaign finance reports, as of October 15, 2008 the Coalition for Our Communities, the organization opposing this tax cut, had raised over $5 million—99.8% from teachers' and other government sector unions.

Individual opponents

Michael Widmer, president of the Massachusetts Taxpayers Foundation,[11]

Gov. Deval Patrick[12]

The Selectman in the town of Wayland voted unanimously to oppose the initiative.

State Rep. Tom Conroy, D-Wayland[13]

Senator John Kerry (D-MA) publicly opposed it while running for reelection for senate.

Republican State Senator and future U.S. senator Scott Brown voted against Question 1 despite voting against raising the state's flat tax to 5.95% while in the state senate in 2003.

Organizations against the measure

Coalition for Our Communities, an organization created by the Massachusetts AFL-CIO that reportedly had $1.34 million with which to mount an effort to defeat the measure. The Coalition's funds are derived mainly from unions, including $750,000 from the National Education Association.[14][15] The group also received $250,000 from American Federation of Teachers Solidarity Fund. Both the NEA and the AFTSF are based in Washington, D.C.[16]

Editorial opposition

The Boston Globe officially asked voters to vote "no" on Question 1.[17]

Arguments that were presented against Question 1

  • Massachusetts would lose about 40% of its income and would deal an $11 billion blow to the state, which would have adverse effects throughout state government.
  • It would put education, health care, public safety and infrastructure at risk.
  • Mass Municipal Association, representing all 351 towns, estimated cuts in local aid as approximately $3 Billion.[18]
  • Proponents have not specified any specific cuts that could be made that approach 40% of state revenue.

Funding

According to campaign finance reports, as of November 1, 2008 The Coalition for Our Communities had raised approximately $6,625,000 since creation and had $117,270.95 cash left. They also received about an additional $650,000 in inkind donations from unions such as donated staff, supplies, postage etc.[19]

History of petition drive and blocking allegations

The proponents submitted about 100,000 signatures to the Massachusetts Secretary of State for the first phase of signature collection. 76,084 of those signatures were determined to be valid, with a requirement that 66,593 must be valid for the initiative to proceed to the next step.[20] The next step was for the Massachusetts State Legislature to take up the measure. They declined to pass it by the first Wednesday in May 2008, meaning that the proponents had to collect an additional 11,099 valid signatures by June 18, 2008. On July 3, it was announced that 15,913 additional certified signatures had been filed, making the measure extremely likely to appear on the ballot.[21][22]

The Massachusetts Teachers Association, whose mailing address is the same as the "Committee for our Communities", admitted in December 2007 that it had made phone calls to people who had signed the petition to place the income tax repeal on the ballot, inquiring about whether their signatures were valid. The calls were made from a group identifying itself as the "Committee for our Communities".[23]

Results

State Income Tax Repeal Initiative[24][25]
Choice Votes %
No 2,070,699 69.37
Yes 914,420 30.63
Valid votes 2,985,119 96.20
Invalid or blank votes 117,876 3.80
Total votes 3,102,995 100.00
Registered voters and turnout 4,220,488 73.52

See also

References

  1. Berkshire Eagle: "Income tax repeal gets 1st ballot slot," July 11, 2008
  2. WSJ Online: "Boston Tax Party," Aug. 5, 2008
  3. Boston Globe: "4 ballot petitions clear 1st obstacle," Nov. 24, 2007
  4. The Colombian: "Washington View: Another tea party brewing in Massachusetts," Aug 12, 2008
  5. American Spectator: "Taxachusetts, RIP," Aug 12, 2008 Archived 2008-08-14 at the Wayback Machine
  6. committee for small government - campaign finance report Archived 2008-10-05 at the Wayback Machine
  7. Boston Herald "Carla Howells tax fight pays off for Her and activist pal"
  8. committee for small government - campaign finance report - 2008 ballot question 1 Archived 2008-10-05 at the Wayback Machine
  9. The committee for small government - campaign finance report- 2002 ballot question 1 Archived 2009-12-17 at the Wayback Machine
  10. Committee for Small Government
  11. Ballot Question Would Eliminate Income Tax In Mass., MyFox Boston, Dec. 2, 2007 Archived 2008-09-24 at the Wayback Machine
  12. WBZtv.com "Ballot Question Rattles Nerves On Beacon Hill," Aug 11, 2008 Archived 2008-08-21 at the Wayback Machine
  13. WickedLocal.com: "Selectmen oppose elimination of state income tax," Sep 3, 2008
  14. Forbes.com: "Backers of tax question have just $24,753 in bank," Sep 10, 2008
  15. Amherst Bulletin: "Efforts under way to defeat income tax ballot measure," Sep 5, 2008 Archived 2008-11-20 at the Wayback Machine
  16. Worcester Telegram & Gazette: "DC donations flood Mass. ballot question campaigns," Sep 21, 2008
  17. Boston.com: "This Question is Not the Answer," Sep 28, 2008
  18. Coalition for our Communities - campaign finance report Archived 2008-10-05 at the Wayback Machine
  19. The 2nd American Revolution
  20. Politicker: "Ballot initiative to abolish income tax will appear on November ballot", July 3, 2008
  21. CapitalNews9.com: "Group wants to abolish state income tax," May 19, 2008
  22. WickedLocal.com: "Union group made calls to tax cut petition signers, challenge seems unlikely" Archived 2008-06-14 at the Wayback Machine
  23. "2008 Return of Votes Complete" (PDF). Massachusetts Secretary of the Commonwealth. 2008-12-17. Retrieved 2008-11-05.
  24. "Enrollment Breakdown as of 15 October 2008" (PDF). Massachusetts Secretary of the Commonwealth. 2008-10-30. Retrieved 2008-11-05.

Further reading

Note: The original version of this article was taken from Ballotpedia's article about the Massachusetts State Income Tax Repeal Initiative

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