The campaign against is led by a coalition of businesses inclined to see Question 6 and 7 as putting the legislative fox in charge of the tax-code chicken coop. Some blame proponents for this state of affairs. Massachusetts has some of the best entrepreneurs, scientists and managers in the country. If we pass the grad tax, we will make it easier for other states, especially those that are in the process of cutting their taxes, to lure away this talent. There is no mention of the 19 percent increase in the state tax on earned income that has taken place since 1989.
Proponents run commercials demonizing CEOs who voice their opposition.
A conservative state legislator has compared the tax to bolshevism. It is voter innocence, not ideology, that grad-tax proponents are exploiting. Proponents freely claim that the grad tax would cut taxes in 1995 for 92 percent of the public, even though the correct number is easily computed to be about 78 percent and even though rising living standards would cause this number to decline rapidly in the future years. They also ignore the Draconian marriage penalty that the grad tax would impose. To estimate revenue effects, the authors had to fall back on a static analysis, which assumes that the state could tax income at 100 percent without inducing taxpayers to change their economic behavior by one iota.