Massachusetts State Income Tax Repeal Initiative, Question 1 (2008)

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The State Income Tax Repeal, also known as Massachusetts Question 1, was on the November 4, 2008 ballot in Massachusetts as an initiated state statute. It was defeated.

Question 1 would have ended the state's current 5.3% income tax on wages, interest, dividends and capital gains. Massachusetts would have joined Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming in not taxing income. Two other states, New Hampshire and Tennessee, had an income tax only on interest and dividends in 2008.

Election results

Massachusetts Question 1 (State Income Tax Repeal)
ResultVotesPercentage
Defeatedd No2,070,69966.7%
Yes 914,420 29.5%

Official results via: The Massachusetts Secretary of the Commonwealth Elections Division

Text of measure

Summary

The official ballot summary of Question 1 was:[1]

This proposed law would reduce the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009, and would eliminate the tax for all tax years beginning on or after January 1, 2010.

The personal income tax applies to income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of “S corporations” as defined under federal tax law. The proposed law would not affect the tax due on income or gain realized in a tax year beginning before January 1, 2009.

The proposed law states that is any of its parts were declared invalid, the other parts would stay in effect.[2]

Specific provisions

If it had passed, this proposed law would have:

  • Reduced the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009.
  • Eliminated the tax for all tax years beginning on or after January 1, 2010.
  • The personal income tax to which the initiative applied is the "income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of “S corporations” as defined under federal tax law."
  • Not affected the tax due on income or gain realized in a tax year beginning before January 1, 2009.
  • States that if any of its parts were declared invalid, the other parts would stay in effect.

Supporters

Supporters included:

Arguments in favor

Notable arguments made in support of the measure included:

  • State politicians have not kept faith with their promises to taxpayers. The Massachusetts State Legislature blockaded a ballot question approved by the citizens of the commonwealth in 2000 that would have reduced the state income tax to 5%.
  • Three million Massachusetts taxpayers earning over $75,000 would save an average of $3,600 each annually.
  • Income tax receipts in Massachusetts account for 39 percent of overall state revenue. State legislators would still have $18 billion to spend if the income tax is repealed.[4]
  • Massachusetts taxes income at 5.3%. By eliminating this tax, a worker will receive a raise of more than 5.3%. This is a permanent raise (well, as long as the income tax is not subsequently re-enacted).
  • With the increased economic growth that results from eliminating the state income tax, other sources of revenue will increase at both the state and local level (more spending will lead to more sales tax revenue while higher demand for housing and commerce will increase property tax revenue).[5]

Opposition

Opponents included:

Arguments against

Notable arguments made in opposition to the measure included:

  • Massachusetts would lose about 40% of its income and would deal an $11 billion blow to the state, with ripple effects throughout state government.[11]
  • It would put education, health care, public safety and infrastructure at risk.[12]
  • It would force the state to raise other taxes and fees in order to make up for lost revenues.
  • Massachusetts already pays less than the national average when it comes to income tax.[13]

Editorial Opposition

The Boston Globe officially asked voters to vote "no" on Question 1.[14]

Polls

See also Polls, 2008 ballot measures.
Month of Poll Pollster Yes No Undecided Reference
October 2008 Suffolk/7News 26 percent 59 percent 14 percent [15]

History of petition drive

The proponents submitted about 100,000 signatures to the Massachusetts Secretary of State for the first phase of signature collection. 76,084 of those signatures were determined to be valid, with a requirement that 66,593 must be valid for the initiative to proceed to the next step.[16] The next step was for the Massachusetts State Legislature to take up the measure. They declined to pass it by the first Wednesday in May 2008, meaning that the proponents had to collect an additional 11,099 valid signatures by June 18, 2008. On July 3, it was announced that 15,913 additional certified signatures had been filed, qualifying the measure to appear on the ballot.[17][18]

The Massachusetts Teachers Association made phone calls to people who signed the petition to place the income tax repeal on the ballot, inquiring about whether their signatures were valid.[19]

Funding

According to campaign finance reports, as of November 1, 2008, the Committee for Small Government had raised approximately $385,000 since creation and had $14,131.72 cash left. They also had about $80,000 in outstanding liabilities.[20]

The Coalition for Our Communities had raised approximately $6,625,000 since creation and had $117,270.95 cash left. They also received about an additional $650,000 of in-kind donations from unions. These contributions included things such as donated staff, supplies, postage ect.[21]

Earlier attempts

The Committee for Small Government advanced a similar initiative, called the End the Income Tax initiative, in 2002. That measure did not pass and received 885,683 votes, or 45.3 percent, of the vote.[22]

See also

External links

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Suggest a link

References

  1. The Massachusetts Secretary of the Commonwealth Elections Division website, accessed December 17, 2013
  2. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  3. WSJ Online: "Boston Tax Party," Aug. 5, 2008
  4. The Sun Chronicle: "Ban income tax and transform Massachusetts," July 17, 2008
  5. http://moderneconomicfreedom.blogspot.com/2008/10/unions-workers-should-favor-repeal-of.html
  6. WBZtv.com, "Ballot Question Rattles Nerves On Beacon Hill," Aug 11, 2008
  7. The Catholic Free Press, " Leaders say Question 1 would cut safety net"
  8. PatriotLedger.com, "League of Women Voters urges rejection of Question 1," Oct 24, 2008
  9. WickedLocal.com: "Selectmen oppose elimination of state income tax," Sep 3, 2008
  10. Boston.com: "2008 Ballot guide," Nov 2, 2008
  11. State House News Service: "Patrick Lends Voice to Those Opposing Income Tax Repeal," March 3, 2008 (dead link)
  12. Boston.com: "Mass. Gov. doesn't know if new taxes needed," Aug 10, 2008
  13. Boston.com: "Mass. Gov. doesn't know if new taxes needed," Aug 10, 2008
  14. Boston.com: "This Question is Not the Answer," Sep 28, 2008
  15. PolitickerMA.com: "Suffolk: Undecideds breaking ‘no’ on Question 1" Oct 24, 2008 (timed out)
  16. The 2nd American Revolution
  17. Politicker: "Ballot initiative to abolish income tax will appear on November ballot," July 3, 2008 (dead link)
  18. CapitalNews9.com: "Group wants to abolish state income tax," May 19, 2008
  19. WickedLocal.com: "Union group made calls to tax cut petition signers, challenge seems unlikely"
  20. committee for small government - campaign finance report
  21. Coalition for our Communities - campaign finance report
  22. Committee for Small Government

Additional reading