Know that old saying, the sixth time is the charm?
Twenty years ago, the fifth effort to amend the Massachusetts Constitution and change our income tax from flat to graduated began like the previous four — with the Legislature deciding to put the question before the voters. Despite the result, I chased down a senator from Lynn who had voted no after having voted yes in the past. “Why switch? Because we took your vote for granted?” I asked him. “No, Jim,” the late Walter Boverini responded. “Now that I’m not running for reelection, I can finally vote my conscience!”
Just months later, in November 1994, voters apparently didn’t need to wait for retirement to channel the spirit of Boverini. They defeated the graduated income tax initiative by more than 2-to-1, in line with the four prior lopsided outcomes.
So, with those drubbings in mind, how to explain the masochism on Beacon Hill, where there are rumblings of yet another attempt? It’s because critics of a graduated tax are right: It would make it easier for the Legislature to raise taxes when they need to (hello, MBTA!). And that’s because it allows legislators to ask more of those who can afford to pay more (hello, Bay State millionaires!).
Then why have middle-class voters rejected the efforts to bring Massachusetts into line with the way two-thirds of the states and the federal government tax income?
First, chronic opponents have done a fine job arguing that after “they” (that would be legislators with insatiable appetites for raising taxes) come for the “rich,” they’re coming for you. That’s the mantra of the state’s longtime anti-tax czarina, Barbara Anderson.
Another reason is that while rank-and-file Democrats have repeatedly embraced the change (ol’ Walter notwithstanding), Democratic leaders have been less enthusiastic. Case in point: Only after he was threatened with a disruption of the Democratic State Convention in 1994 did Senate President Bill Bulger agree to allow a vote in the Constitutional Convention. (I know, because I was one of the people who did the threatening.)
Abraham Lincoln presided over the introduction of the first progressive income tax, which helped fund the Civil War. A century and a half later, a fellow Republican, new governor Charlie Baker, is certainly not on the same page as Honest Abe. “Massachusetts needs to compete with many other states for jobs and economic opportunity,” he recently told me. “For the most part, states that are succeeding are states that operate in flat tax environments. Period.”
Thing is, when you look at major competitor states, like California, most of them have a graduated income tax, and many are growing far faster than Massachusetts.
Baker should lead the reform, either because he believes in equity (use it to lower property taxes, a promise his predecessor made but couldn’t pull off) or because some day he may choose to eschew his read-my-lips stance. So far, he’s sticking with his recent pronouncement: “We need to start from the premise the taxpayers have been taxed enough.”
That’s true: Most have been. In fact, many in Massachusetts have been taxed more than enough. Those in the lowest 20 percent of personal income pay more than twice as high a share to state and local taxes than those in the top 1 percent, according to the Institute for Taxation and Economic Policy. Add in the state’s growing reliance on take-from-the-poor and give-to-everyone-else gambling revenue, and you have fertile territory for change.
And there’s another reason. Standard & Poor’s, hardly a left-wing think tank, is on board: With “rising income inequality, the move toward more progressive tax rates may help states generate faster tax revenue growth than would flatter tax regimes.’’
I wondered if Anderson would herself be persuaded. Her response to a possible sixth attempt? “Add two more sixes and you have the mark of the devil. . . . Are they starting with the assumption that we’re dumber than we were the last five times?” Let’s mark her down as undecided.
Stan Rosenberg, the new Senate president, seems ready, recently telling me: “What it allows you to do is relieve some of the pressure on people at lower- and middle-income levels.” House Speaker Bob DeLeo, who was a yes last time, now appears agnostic. Here’s betting he decides as he did before, though, since his chosen Revenue Committee chairman, Jay Kaufman, supports the move.
Even if the two Democratic leaders ensure the question makes it to the ballot, it will likely be 0-6 unless Baker and his huge bully pulpit leads the counter-intuitive charge. Only anti-communist Richard Nixon could go to China. Maybe only no-new-taxes Charlie Baker could spearhead this kind of tax revolution.
How Massachusetts state and local taxes rip off the poorest citizens
10.4% — Share of personal income paid by those making less than $22,000
8.7% — Share paid by those making between $70,000 and $118,000
4.9% — Share paid by those making $860,000 or more
Source: Institute for Taxation and Economic Policy (2015 projections, after federal offset)