Sunday, December 30, 2007

Taxachusetts, again

Jeff Jacoby is hoping against hope that 2008 will be the year that Massachusetts abolishes the state income tax:

"Civilization costs something," the governor says, echoing the 1904 dictum of Oliver Wendell Holmes Jr.: "Taxes are the price we pay for civilized society."

Maybe so. But in Massachusetts lately, taxes are also the price we pay for Big Dig corruption, for larcenous public-employee pensions, for state-owned golf courses, and for wretched public schools. Higher taxes are no guarantee of a more civilized society.

As a matter of fact, when Holmes defended taxes as the price tag of civilization, there were no federal and state income taxes. Massachusetts didn't begin taxing incomes until 1916, which means that for most of its history, the Bay State survived - even thrived - without an income tax. As Howell's ballot proposal advances, the fearmongers will shrilly warn that voting yes will plunge us into the Dark Ages. Like all addicts, those hooked on high taxes are terrified by the prospect of giving up their drug. They cannot imagine how much better they will feel when they learn to live without it.
Good luck with that. The Bay State income tax rate was "temporarily" increased up from a baseline 5% rate back in the late eighties and it hasn't come back yet. Jay Tea recounts what happened in 2000 when Massachusetts voters finally had the temerity to ask for the old rate back:

In 2000, in a rare display of common sense, the people of Massachusetts had a referendum on their income tax rate. They voted, 59%-41%, in favor lf slashing it from 5.85% down to 5%. (It had been raised as a "temporary, emergency measure" in the 1980's.) The then-speaker of the House didn't care for losing control of that much money, so he got the legislature to "freeze" the cut at 5.3%, with plans to jack it back up later.
So much for vox populi. They don't call it the "Commonwealth" for nothing: your money is the state's money.

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