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Sources: smallgovernmentact.org, http://www.boston.com/news/local/articles/2008/10/05/who_needs_state_taxes/, http://votenoquestion1.com/

The first question on the Massachusetts this year is whether the state income tax (5.3%) should be repealed. The official site for the yes view of the question, smallgovernmentact.org, claims that the repeal of the income tax will lead to these things:

• A family will save an average of $3,700 for each taxpayer. Money to keep, to spend for family, retirement, or charitible contributions.
• Elimination of the 5.3% income tax on wages.
• For those living on an annuity, there will no longer be a 5.3% income tax on interest or dividends.
• House, business, and stock sales, will no longer carry a 5.3-12% interest on capital gains.

Best of all, there will be $12 billion less that the state government can waste, misspend, hand out in pork-barrel projects, or use for Big Government Programs that fail and that make things worse.

It’d be nice to get some money back, eh? Yvonne Abraham wrote a satirical article that goes against this ballot question. Abraham pokes at Libertarian Carla Howell’s claim that 41% of state dollars are wasted by saying: “In fact, 41 cents of every state dollar is wasted, according to Howell. She gets this figure not from budget experts – or experts of any kind – but from randomly selected voters asked for their own estimates. And that’s good enough for me.” Of course, she’s kidding. She gets this 41 cents statistic from this PDF There is also another site, votenoonquestion1.com, that has a graphic showing how much aid states would lose as a result of repealing the state taxes and a video showing what will be cut.

The Vote YES site claims that the state budget for this year is $47.3 billion. Removing $12 billion from this would seriously damage the economy, leaving them with 25% less (The Vote NO site claims 40% but that seems a little high to me). Without this money, the state would not be able to pay for a number of its services, including education, street cleaning, and other public work. The state budget pays for the wages of public workers; with $12 billion less, some of these workers would lose their jobs and/or have their wages lowered. Services like the MBTA would receive less money, and taking money away from them would be a disaster. According to Abraham, the Massachusetts Taxpayer Foundation’s president Mike Widmer says, “abolishing the tax will cripple Massachusetts, hike property taxes, produce massive unemployment, and cut most state programs by 70 percent.”Too much money would disappear from the state; the state needs that money. They’d probably get it back from us by means of a higher sales tax, higher property tax, or both. Either way, something’s going to increase.

The last statement in that first quote, the idea that “there will be $12 billion less that the state government can waste, misspend, hand out in pork-barrel projects, or use for Big Government Programs that fail and that make things worse,” needs to be tackled as well. Yes, governments waste money. But how can one be so cynical? There is no evidence presented that definitely says that 41 cents out of every state dollar is wasted – all that is used is a survey of Massachusetts residents. A survey’s not good enough evidence – just because people think that the government is wasting nearly half the money they get does not mean they really are.

This income tax must be in place because it provides the state government with a good chunk of its income. Without this income, we will lose many of our services. The amount of money that we would get back from this – the $850 to $3700 that is being spoken of – in no way replaces the benefits of having teachers, people cleaning your streets, picking up your trash, taking care of books at the library, and so on. Vote NO on Question 1.