Fiar Taxation and Good Government

Below is the op-ed that appeared in Worcester Magazine from my brother Ken and I

To learn more about the Patrick/Murray plan go to: http://www.mass.gov/governor/agenda/

Good government, first rate public services, fair taxation: Massachusetts once stood for all that. Republicans like Frank Sargent, Democrats like Ted Kennedy, and more recently independent legislators like Congressman Jim McGovern, all thought there was a public interest and it was their job to take care of it. Governor Deval Patrick and Lt. Governor Tim Murray have revived this Massachusetts tradition, persuading us that good government is possible, that excellent public services are our shared responsibility, and now they are making a strong case that taxes should be fair. Unfortunately, so far Republicans are attacking the Governor’s plan while most Democratic leaders are running for cover. Only a few courageous Democrats, like Representative Jim O’Day, have had the courage to join the Governor and Lt. Governor in taking on the fair tax question.

Make no mistake, there is a very big fair tax question in Massachusetts, founding home of American good democratic government. We accept a flat state income tax, even when our federal government and many states have more progressive graduated taxation as a fundamental principal. We rely very heavily on regressive sales tax that falls disproportionately on people of limited income. And, sadly, we now have become even more reliant on revenue from various forms of gambling. The lottery is big part of our political landscape and now state budgets are now being built around expected revenues from casinos. What would Puritan icon John Winthrop or founding mother and father John and Abigail Adams think of relying on gambling to meet more and more of our public obligations? Add annual pressures that place lots of weight on residential property taxes while local communities bid against each other offering decades-long tax exemptions for new business construction. We in Massachusetts should and can do better.

Let’s walk through the Patrick/Murray argument. First there are such things as public goods, like education, public safety, social services and transportation. These are things we do together as a people to maintain our common life. This is what philosophers mean by the common good. Patrick and Murray, like other democratic leaders of the past, believe that these public goods are the shared responsibility of all of us. They make the case that we need more revenue to maintain these common goods. In order to meet our responsibilities we will need somewhat higher taxes. The national Republican party has crippled itself as a trusted custodian of public business by signing onto a demagogic pledge of “no new taxes” after showering billions of dollars of tax cuts for the wealthiest Americans during the Bush era. They even persuaded many good citizens that allowing the unwise and unsuccessful tax cuts for the wealthy to expire was a tax increase rather than a tax reform correcting an earlier mistake. And anti-tax Republicans have plenty of Democratic party collaborators who avoid mentioning capital gains tax rates or the indefensible “carried interest” loophole that protects very wealthy people and serves no conceivable public purpose.

So the Governor and Lt. Governor are now boldly asking us to reduce our reliance on the regressive sales tax and consider modest increases in the income tax that will make that tax a little less flat and a little more fair. Once upon a time it was a mantra in economics classes and fair-minded families that ability to pay was one component of determining fair allocation of taxes. We called that progressive taxation, and it worked very well. During our era of greatest economic growth and most widely shared prosperity, the 1950s, the federal income tax ranged up to 90% on the highest incomes. No one advocates returning to those levels, but every serious candidate for public offi ce should explain what is meant by fair and effective taxation.
But don’t blame politicians alone for avoiding tough issues of public revenues, spending and debt. “No new taxes” pledges are irresponsible, and so are exaggerated claims about abuse and distracting arguments about closing “loopholes” to solve problems without pain. But politicians do badly on these matters because we do. When given the opportunity we in Massachusetts voted against the progressive income tax, we adopted proposition 2 ½, binding local communities and essential services to the state with no plan to meet those responsibilities. And in 2008 30% of us voted to abolish the state income tax altogether. Surely the Governor and Lt. Governor knew that they would have trouble with Republicans and far too many Democrats, but they took a chance on us to recognize that there is a better way to fund our community’s needs.

Governor Patrick, Lt Governor Murray and brave legislators are now offering us in Massachusetts another chance to carry on our tradition of good citizenship and shared responsibility. We can choose to support their effort to build a better Commonwealth by making targeted investments in education, transportation and infrastructure that will benefit cities like Worcester, towns like Holden and all the people in the Commonwealth. Let’s join them in rebuilding a rich and successful common life, together.