Tax-cut fever

Now both parties are peddling tax-cut plans the state cannot afford

Scott Harshbarger has carefully cultivated a reputation for being tough-minded and independent. But for the defining move of the biggest political run of his life, he has chosen to pander without shame.

Harshbarger, the attorney general and leading Democratic candidate for governor, announced this month a plan to cut state income taxes by $1.53 billion a year. With this announcement, he outbid even his Republican rivals, turning the governor's race in a deeply disturbing direction: all the contenders now seem to agree on the wisdom of a massive tax cut regardless of the social costs.

Harshbarger spun his proposal -- "Working Families First" -- as a way to help those who are struggling to get by. Of the proposals put forth by the gubernatorial candidates, Harshbarger's is indeed the only one that increases the personal deduction -- one way to make the tax system more progressive and direct the benefit to those who need it most.

But mostly, his proposal is a pitch to well-to-do voters. The wealthier the taxpayer, the more he or she would get. A full 25 percent of the benefit would go to people with incomes of $100,000 or more. The tax proposals from the other candidates -- Democrat Pat McGovern and Republicans Joe Malone and Paul Cellucci -- are even more regressive.

The new tax-cut consensus is driven in part by the old demons of the Dukakis era. But those demons have since been exorcised. In 1981, the tax burden -- state and local tax revenue as a percentage of personal income -- was the sixth highest in the nation, well above the national average. Now the state ranks 26th, just below the national average. Massachusetts is no longer Taxachusetts. (Some note that the current income tax rate was meant to be temporary, to dig the state out of debt. But Weld and Cellucci have already cut other taxes by a billion dollars -- chiefly to the benefit of selected industries.) The people even seem willing to save for a rainy day: witness the failure of Barbara Anderson's tax-cut referendum.

The main argument you will hear for a cut is the booming economy. Revenues are up, so why not cut taxes? This is the very definition of short-sightedness: to make a permanent change based on fleeting conditions.

There is bound to be trouble ahead. The economy will inevitably hit a recession. Add to that the cost of the nation's largest public works project: from next year to 2001, some $5.6 billion of Big Dig construction bills will come due, and Congress has been threatening to stick Massachusetts with more and more of the tab.

Also over the next few years, tens of thousands of people will be dropped from the welfare rolls without any clear plan for how to become productive members of society -- or how to survive.

And the crisis in affordable health care is only getting worse. A recent Boston University study estimated that 60,000 new Massachusetts jobs had been created in 1996, but 95,000 more people found themselves without any health coverage.

Then there is the ongoing effort to retool the state's schools. "If we seriously think we can cut $1.5 billion from the state revenues and still fully fund all aspects of education reform, we're living on cloud cuckooland," said Senate President Tom Birmingham this week.

Indeed, the tax-cut furor -- led by Republicans, fueled by nervous Democrats -- threatens to foreclose any real discussion of the possibilities, and promise, of government.

These are the facts nobody wants to hear: we live in a state where more than 1 in 10 residents live in poverty. Among children, the poverty rate is an unconscionable 16 percent. Food banks are reporting record statewide demand. Boston's homeless shelters are overwhelmed. On a recent morning, a homeless man was found frozen to death on the Boston Common. All this in what is hailed as an economic boom.

Some ask: if not a tax cut now, then when? But there is another question: if we cannot find a way to address these problems now, then when?

What do you think? Send an e-mail to letters[a]phx.com.