Monday, September 14, 2015

House Minority Leader Brad Jones: Two-Tiered Tax System a Bad Idea for State's Taxpayers

The Boston Globe ran the attached opinion piece by House Minority Leader Bradley H. Jones, Jr. (R-North Reading) in its Globe North edition on Sunday regarding the “millionaire tax” ballot question proposed for the 2018 state election:

One of the potential ballot questions being eyed for the 2018 state election would replace Massachusetts’ flat tax rate – currently set at 5.15 percent – with a two-tiered system where taxpayers in a higher income bracket would pay at a higher rate. Voters have rejected five similar ballot measures in the past, most recently in 1994.

The Fair Share Amendment now being proposed would tax income over $1 million an additional 4 percent, with the new revenues that would be generated earmarked for education and transportation.

Certainly everyone can agree on the importance of maintaining a quality education system to prepare our children for college and the workforce. And after last winter’s historic snowfall ground the MBTA to a virtual halt and stranded thousands of commuters, there is no doubt that transportation improvements need to be near the top of the agenda. But there are ways to improve our schools and public transportation without raising taxes.

Massachusetts residents already face the fourth highest per capita combined state and local tax burden in the country. Raising the income tax rate for one group of Massachusetts residents puts us on a slippery slope. How long before we start imposing higher taxes on other segments of the population and making the state even more unaffordable?

Historically, Massachusetts has a poor track record when it comes to taxes. In 1989, facing a large budget deficit, the Legislature passed a “temporary” tax increase, raising the income tax from 5 percent to 5.95 percent. Frustrated voters demanded relief and sent a clear message by overwhelmingly approving a 2000 ballot initiative to return the tax rate to 5 percent. Today, 26 years after the “temporary” tax increase went into effect, taxpayers are still waiting to get back to the promised 5 percent.

Here is something else to consider: In 1989, the state budget totaled $12 billion. Today it stands at $38.1 billion, more than three times the 1989 total.

The fact is, Massachusetts does not have a revenue problem; it has a spending problem. The Legislature needs to practice fiscal restraint by setting priorities and making sure taxpayer money is being used both efficiently and cost-effectively, rather than automatically resorting to tax increases.