A Taxing Question

David Moltz:

A November ballot referendum to repeal Massachusetts' income tax has many educators scared. Though supporters of the referendum argue it would make the government more efficient and effective, detractors argue that it would put valuable public services at risk. Especially concerned are public college and university administrators, who warn that, for the state's higher education system, the consequences of an income tax repeal would be grim.

A similar referendum failed in 2002. But to the surprise of many in the state, the measure -- which would have abolished the income tax immediately -- received a respectable 45 percent of the vote.

This year's referendum would reduce the state's income tax rate from 5.3 percent to 2.65 percent in the upcoming year and eliminate it entirely beginning in 2010. Many fear the measure will pass this time, since it is more gradual than the 2002 measure and comes before voters at a time of exceptional concern over their finances. If the measure passes, Massachusetts would join nine other states that do not tax income. Many of those states have never had an income tax and have developed, over the years, alternative sources of income. This is not the case in Massachusetts.

Posted by Jim Zellmer at October 13, 2008 11:15 AM
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