The myth of Taxachusetts

Removing revenue sources at a higher level makes tax burdens trickle down. That's been shown.

Unfortunately, the initial idea of "trickle-down" (aka voodoo economics) was something different - which hasn't worked.

People used the same logic as Suldog - and look what happened! We are STILL living with that legacy in poorly run city governments.

As far as I'm concerned, we have the wrong target and tactics. The real problems are 1)lack of transparency in government and 2)archaic constitutional stipulation that fees and taxes (e.g. gas tax) are not linked to the services they are supposed to fund. The result is a legislature that sees a pot of money and spends as it has to or sees fit and doesn't maintain infrastructure like it should, guts the universities but raises tuition, doesn't tie revenues to services, etc.

Eliminating income tax does nothing for either of these problems. Amending the constitution to bring the taxes closer to their intended funding targets would do wonders for the way the legislature spends. Forcing the legislature to be more transparent in the ways it funds large projects would advance that end.

Meanwhile, I may leave if this goes through. Prop 2 1/2's gigantic brown streak of an impact on the livability of Mass is a cakewalk compared to the kind of massive shithole this place will become.

It is possible that removing most of the state's budget would be an inducement to reduce expenditures. It is also unlikely that the reduction in expenditures could match the reduction in revenues. The difference would be made up with debt.

If the state suddenly came up 11B short, it would undoubtedly have to slash the budget. It would also probably not be able to eliminate the 11B immediately. Even if most of the firefighters, teachers, social workers, and police in the state were fired immediately (after all, that is what you are suggesting here), the state would still have termination costs, unemployment costs, and pension costs for them, as well as physical plant and sunk costs.

The shortfall would be made up, as always, by borrowing. That borrowing would be very expensive, as the state's credit rating would have plummeted when its revenue disappeared.

Once the income tax was reinstated (as I would imagine to be likely once people realized nobody was answering the phone at the police station any more, that whole blocks would burn before any firefighters showed up, and that they had to shovel their own damn streets now) the state would be in hock for tens of billions of dollars at a lousy rate, and the cost of deferred maintenance would also be great. The net result of the libertarian experiment would be an increase in taxes -- just as the net result of Bush's pissing the surplus into the sand in Iraq will be us passing on higher taxes to our children.

The problem here is a conflict between two different definitions of fiscal conservative. You have the faith-based fiscal conservative - who says cut taxes by all means necessary, and leave the future in God's hands (i.e. devil take the hindmost). And you have the reality-based fiscal conservative, who says let's do the math, compromise, and make sure we balance the budget.

State finance has some things in common with household finance. Saying we can abolish the income tax and this will lead to financial responsibility is much like saying you can quit your job and this will lead to lower expenses. Sure, it will -- you'll get kicked out of your apartment for non-payment, and end up somewhere cheaper eventually, and you won't be eating out much anymore. And, of course, you'll have huge credit card bills to pay off for the next decade. Was something really saved there?

Myself, I'd rather just be responsible in the short term, on both household and government levels. I expect my government officials to balance their checkbooks, just like I balance mine. If they can do that on 11B less a year, bully for them. But the name on their credit card is mine, and if they run it up, I have no illusions over who will have to pay it off. I'd much rather they didn't play silly buggers with a great libertarian experiment that would cost me more money in the long term.