There is a ballot question in the upcoming state election to eliminate the state income tax. I did some research into the arguments for and against this question, and found that they all make the same incorrect assumption — that the budget would have to take the loss of the income tax and not make up for it in any other way. In fact, the full text of the question only specifies the elimination of the income tax as a binding measure, not any sort of reduction of the budget. I can think of several reasons why it would be a good idea to eliminate the state income tax and replace its portion of the state budget with increases in property taxes, something New Hampshire and several other states have been doing for years.
1. It would be more efficient for the state government.
We already have a system in place for collecting property taxes. Increasing the property tax rate would not require any more infrastructure than we already have. Eliminating the income tax would allow us to shed an entire department of the state government, saving the taxpayers money.
2. It would be cheaper and easier for taxpayers.
Every year I pay H&R Block something like 30 bucks to process my state income tax form. The fact that there’s an entire private industry that revolves around a specific type of tax should be a warning sign that said tax is too complicated. Nobody has to pay a 3rd party company anything to handle their property or sales taxes. Eliminating the income tax would save time and money for anyone who works in Massachusetts.
3. Taxes are a disincentive.
Taxes, while bringing in revenue, also dissuade certain behaviors. Cigarettes, for example, are heavily taxed. Sales taxes dissuade consumption and encourage saving. Property taxes encourage living efficiently. With the income tax, we should be asking ourselves: what are we trying to disincentivize? Productivity? Making a living? Eliminating the income tax would eliminate an undesirable disincentive.
For these reasons, I will be voting Yes on 1 in November, and I hope you do the same.
You make one major assumption here that is not addressed here. There’s nothing stating that by eliminating the income tax there will be an increase in property taxes. (I could be missing something but…) Is this something that would have to be addressed once this measure passes? How long would it take to get a higher property tax through– and is that something that would even happen?
My second question is why does increasing property taxes encourage living efficiently? Is it not true that two people living in an identical house in 2 different parts of the state might pay different property taxes just because of their location and the “value” of the property? How does that make people live more efficiently?
Also, your statement “Nobody has to pay a 3rd party company anything to handle their property or sales taxes” shouldn’t imply that paying someone is necessary to file your income taxes, because it is not. Every year I have done my taxes on my own without paying anyone. But you’re right…nobody has to pay a 3rd party company to get this done. Places like H&R Block prey upon people who can afford to pay this fee (minimal to some). Now don’t get me wrong. I am not arguing that this process is not labor intensive. It sucks, but the issue of taxes being too difficult doesn’t have to be solved by cutting this tax in half. Instead, I would fix the problem and make it easier for taxes to be filed. Did you know that the Fed actually has all of the information it needs to give you a bill or to write you a check? Wouldn’t it be nice if they could do that along with our states?!?!
I just want to point out that I am just trying to raise some questions here. I already made my decision to vote no because after reading the full text to the question I concluded that this was not thought out well enough to make this cut happen at this time. I’m not saying that an income tax cut would be bad, I’m just saying that this question has not addressed all of the necessary points before such a question should even be posed in front of our state!