Tax cut supporters argue that the issue is one of the state keeping its promise to taxpayers. A promise, they argue, in 1988 to increase the income tax rate from 5% to 5.9% on a temporary basis. This was to help alleviate the near economic disaster the state faced during the late 1980’s. CLTG activists have tried to convince the legislature for the past several years that the time was right to gradually roll the tax back to 5%.

Cellucci makes the case that by cutting taxes the government can help grow the economy. He argues that the high costs of doing business in the Northeast, coupled with high taxes, make Massachusetts unattractive to businesses looking to expand or relocate. Estimates say the rollback, once fully phased in, will reduce the tax burden by $1.5 billion a year.

Taxes Have Been Cut

However, legislative leaders have pointed to a long series of tax cuts, that have been passed into law since 1991, as evidence that a reduction in the tax rate to 5% is unwarranted. Over the past decade a number of tax cuts have been spearheaded by former Governor Bill Weld and Governor Paul Cellucci. In 1998, the Legislature passed the largest tax cut in state history totaling $1.8 billion.

House Speaker Thomas Finneran and Senate President Thomas Birmingham forcefully argue that rolling the income tax back to 5% is not possible when you take into account the huge demands being placed on state government for increased spending on education, healthcare, infrastructure, affordable housing and local aid.

"Everyone would like to pay lower taxes, but in order to do so something has to be cut. Just the state’s pension appropriation alone is $1 billion a year. We really need to look closely at this dangerous proposal," said Association President Ralph White. "It is easy for Barbara Anderson to say ‘cut taxes’, when she does not have to be the one figuring out where to cut. There are just too many important issues that must be addressed to take $1.5 billion off the table. While it may sound self-serving, many of these issues involve public retirees and survivors."

As the November election draws nearer, the Association will keep our members updated with new information on this issue.