Boston Tax Party

The Wall Street Journal

August 5, 2008; Page A18

Massachusetts is about the last place one would expect a tax revolt, but that's what's brewing in Beantown. The state board of elections recently certified that citizen activists have gathered the 125,000 signatures required to qualify an initiative for the November ballot to eliminate the state income tax.

The Small Government Act would repeal the 5.3% income and wage tax, as well as the state capital gains tax, which reaches as high as 12%. The ballot initiative would replace the $12.5 billion in taxes with . . . nothing. "One of the points here," explains Carla Howell of the Committee for Small Government that is driving the referendum, "is to force the state legislators to start cutting the bloated state budget." The political shock of having no income tax would force the pols on Beacon Hill to make the difficult spending choices they now refuse to make.

The referendum may seem the longest of long shots in a state represented by some of Congress's biggest spenders. But the same initiative was on the ballot in 2002, and though the political establishment roared with laughter through Election Day, the measure got 45% of the vote. This time pro-tax forces such as the Massachusetts Teachers Association are planning to spend millions of dollars warning of Armageddon.

They have cause to be worried. A Fabrizio poll for Citizens for Limited Taxation discovered that the average Massachusetts voter believes that 41 cents of every state tax dollar are wasted. Coincidentally, that's the share of the state budget funded by the income tax. One big drain is a pension program that doles out billions each year to double-dipping pensioners and state workers retiring at taxpayer expense in their late 40s or 50s.

Nine U.S. states have no income tax, including such economic climbers as Florida, Nevada, Tennessee and Texas. These states are doing fine funding schools, hospitals and police without the income levy. Over the past decade 330,000 Massachusetts residents have packed U-Haul trailers and left -- more than have even fled Michigan -- and many have gone to no-income-tax New Hampshire.

"The idea here is to stop being on the defensive in fighting against big government and to start taking the political offensive," says Ms. Howell. She says the tax repeal would give every Massachusetts worker a 5% after-tax pay raise, or about $3,000 extra income per family. That's attractive when Census data show that, after inflation, state budgets nationwide are up 18% since 2005 while paychecks have remained flat.

The forces of the tax-and-spend status quo will descend on this initiative like British troops after the original Boston tea party, but somebody has to make an effort to stop the relentless growth of government.

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