New Boston Post often publishes examples of wasteful and harmful spending by the Massachusetts state government. Since the state budget is controlled by left-of-center legislators and left-of-center bureaucrats, there’s only one way to decrease the amount of waste and harm: Give them less money. It’s a two-fer, because it means Massachusetts residents would keep more of their money. That’s what The Pioneer Institute’s executive director, Jim Stergios, has in mind with a ballot question he proposed earlier this week, to decrease the state income tax from 5 percent to 4 percent. It’s the epitome of a modest proposal – it would start by reducing the income tax rate to 4.67 percent in 2027, then 4.33 percent in 2028, then 4 percent in 2029. The gradual reduction over three years would give appropriators plenty of time to adjust their bloated budgets downward. Another plus: A new lower rate would lower the disincentive to savings and investment that the state’s current tax scheme causes, and it might help keep more of our millionaires in the state, whose wealth helps provide jobs and other opportunities for everyone. If enacted, a new 4 percent state income tax rate would decrease the top rate in Massachusetts, which is currently 9 percent for incomes more than $1 million. The current top rate consists of the current 5 percent that almost all earners pay plus a 4 percent income tax surcharge that state voters approved in November 2022. The new top rate would thus be 8 percent – a 4 percent income tax on everyone, plus the 4 percent surtax for incomes more than $1 million. Just as a one-percentage-point decrease in state income tax would be a modest boon to most taxpayers, it would be a modest boon to people who make more than a million dollars a year. But it would send an important signal that Massachusetts isn’t at war with its high earners. The point of such a message is not that rich people need more money, or that they can’t make do with less. The problem, as we pointed out recently, is that sticking it to the rich is an indirect way to sticking it to the rest of us, because through graduated income tax schemes a significant portion of rich people’s money turns from productive (helping start and expand businesses that employ people and increase the state’s economy) to unproductive (dissipating through inefficient government spending that doesn’t create wealth). But regardless of the effect on rich people’s wealth, an income tax rate reduction would quickly increase the bottom line of the vast majority of people in the state. Indeed, the beauty of Stergios’s proposal is that it would quickly and directly help everyone by decreasing their tax burden. The modern state income tax in Massachusetts began in November 1915, when voters approved an amendment to the state constitution (Article 44) allowing the state legislature “to levy a tax on income,” with no particular rate attached to it. The first state income tax approved by the state legislature under this amendment took effect in 1917. That version exempted the first $2,000 of income, according to an academic journal article published the year before. At the time, the median income in Massachusetts was roughly half of the exemption (according to estimates), so the state income tax wasn’t paid by most people. Nowadays it is, of course – the personal exemption is only $4,400, while the median income in Massachusetts in 2023 (according to Statista) was $106,500. So a decrease in the base rate of state income tax would directly help everyone. Left-of-center politicians and bureaucrats will not opt on their own to decrease their power by decreasing their public spending, so there’s only one way to decrease the amount of tax revenue: Let the voters decide at a general election. But that can’t happen without your participation. Referendums don’t get on the Massachusetts general election ballot by themselves. State law requires that they get a ton of signatures of registered voters. Of the 47 ballot questions proposed earlier this week for the November 2026 general election in Massachusetts, for instance, the vast majority won’t make it to the ballot, because the bar is so high. So if you see someone collecting signatures for this worthy measure at a supermarket or the dump, spend the two minutes or so to sign the sheet. We all might benefit if you do.
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