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Voting yourself a tax cut

Author: John Carpay 2001/06/21
How Massachusetts taxpayers used citizens' initiative


This past November in the state of Massachusetts, 59% voted in favour of a citizens' initiative to repeal a "temporary" hike in income tax.

Facing a fiscal crisis in 1989, legislators raised state income tax from 5% to 6.25% as a "temporary" measure to balance the books. But politicians being politicians, the tax was only reduced to 5.95% even after the budget was balanced. Meanwhile, annual state spending continued to grow, rising from $12 billion in 1989 to $21 billion in 2000, with $1.6 billion in "reserve funds" piling up.

The majority of taxpayers wanted to see the 1989 promise honoured, but Massachusetts politicians thought they knew better. Individual citizens and taxpayers groups lobbied for years to return the income tax rate to 5%. But legislators said the state just couldn't "afford" this "fiscally irresponsible" tax cut, and that health and education would suffer. Organized pressure groups, such as public sector unions, were able to lobby more effectively than taxpayers. Special interest groups prevailed over majority opinion.

Using the citizens' initiative process, citizens gathered over 145,000 signatures, more than twice the 57,000 required by law, to put a tax cut proposal to a state-wide referendum. The proposal to return income tax to 5% was called "Question 4", and was added to the ballot to be used in the November 2000 elections.

The teachers' union, public sector unions, and special interest groups spent $3.3 million to defeat Question 4. They argued that the government would lose $1.2 billion in revenues over a period of three years, causing health, education and other government services to suffer. They said the average family savings of $500 per year were worth only "a pizza per week" - a small sacrifice for the common good.

Citizens for Limited Taxation and other supporters of Question 4 argued that a family could use $500 per year to buy more pizza if it wanted to, or pay heating bills, or save for their children's education, or give more money to charity. They believed that families could spend their own money with greater wisdom than politicians. They argued that government was not spending taxpayers' money wisely, and only a tax cut could curb the politicians' appetite for ever-increasing spending. Finally, they demanded the 1989 promise that the tax increase was "temporary" be honoured.

Supporters of Question 4 spent only one third as much money as their opponents. But on November 7, in addition to voting for their state and federal representatives, 59% of Massachusetts voters approved Question 4 and gave themselves a tax cut. As a result, Massachusetts income tax is being gradually reduced back down to 5% by 2003.

This is an example of how citizens' initiative can be a tool for taxpayers. When they return to the Legislature this fall, Alberta's M.L.A.s will vote on Bill 211, the Citizens' Initiative Act. Bill 211 will give Albertans the right to initiate legislation to be voted on in a referendum. If 60% of Albertans voted for the proposal, it would be introduced as a Bill in the Legislature, to be voted on by M.L.A.s. Citizens' initiative would enhance and improve democracy. Tell your M.L.A. to vote for Bill 211.

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