Yes: Chris Matthews of Scituate, a member of Progressive Massachusetts and treasurer of the Plymouth County Democratic League
The MBTA is falling apart, property taxes are rising annually, and Governor Charlie Baker recently cut desperately needed substance-abuse funding to balance the budget. The time has come for Massachusetts to join the majority of states in implementing a progressive income tax to increase revenue and reinvest in our communities.
Today every Massachusetts taxpayer, from CEOs earning millions to minimum-wage workers, pays the same income tax rate of 5.15 percent. But when we look at the total state and local tax burden, which pays for services, infrastructure, and education, the richest 1 percent only pay between 4.8 to 6 percent of their income, while the poorest Massachusetts taxpayers pay 10.1 percent, according to a 2009 report (http://www.itepnet.org/whopays3.pdf). This means we’re overtaxing those least able to contribute while giving a discount to those most able -- a regressive tax structure. Instead, we could increase tax rates based on income with a graduated income tax, like our federal tax system, increasing fairness.
Despite our needs and continuing budget woes, our income tax rate has actually decreased from 5.85 percent in 2000 to 5.15 percent today. That’s meant less money for improving education, public transit, and local aid, leading to cancelled trains, growing class sizes, and unsafe roads and bridges. Without a graduated income tax, the Legislature has had to resort to regressive measures to balance the budget, like raising the sales tax and reducing local aid, spurring increased property taxes. These types of taxes hurt the poor and retirees the most. With increased revenue from a graduated income tax, however, the state will be able to slow down property tax increases, reduce the sales tax, and fund important services that benefit everyone.
Massachusetts voters have historically used common sense regarding taxation and funding our communities. We rejected a repeal of the income tax in 2008. In 2010, we rejected a reduction in the sales tax without replacement revenue. I hope the state will once again use common sense and support Senator Jamie Eldridge’s legislation to implement a progressive, graduated income tax, an important first step in restoring fairness to our tax code and keeping Massachusetts a great place to live.
No: State Representative Geoff Diehl, a Whitman Republican
Why would we want to further our state’s economic competitive disadvantage? That’s what will happen if a graduated income tax is implemented. The concept is that the more you earn, the larger the percentage of tax you must pay. You are penalized for working harder. Massachusetts taxpayers already face a hefty burden, especially when compared with our New Hampshire neighbors, who don’t pay income, sales, inventory, or excise taxes, to name just a few.
We live in an era of unprecedented mobility, where people and businesses can easily relocate. Taxpayers can avoid paying higher marginal rates by moving. After losing a congressional district of people, how many more can we force out as economic refugees? And two years ago, when the Legislature passed the infamous tech tax, numerous companies made plans to leave the Commonwealth to avoid the competitive disadvantage. The state was going to lose countless jobs, so the tax was repealed six short weeks after it was signed into law.
Increased marginal rates will devastate our small-business community, which creates the majority of new jobs within the state. Over the past year, we have added to their burden by increasing the minimum wage and a host of new regulations. The higher the cost of doing business, the less likely they are to succeed. A progressive tax will not entice new businesses to Massachusetts and will force others out, like the tech companies had threatened.
Pro-high-tax officials suggest that a graduated income tax will result in lowering taxes on the middle class and the working poor. That’s a “fool’s gold” promise. Initially, it will target higher-income households. But they are mobile, so many of them will relocate. Hence, the new, higher marginal tax rates won’t raise the money anticipated. What will happen next? They will lower the income level so the middle class will be paying the higher rates! Every time a tax has been targeted at the rich, it trickles down to the middle class.
Massachusetts voters have been asked their opinion on a graduated income tax five times. Each time, it has been resoundingly and rightfully rejected.