Ash UMass Economics

Ash and Page call for changes in state taxation

Michael Ash, economics professor, wrote a column with Max Page, professor of architecture and history, in The Daily Hampshire Gazette, calling for changes in the state taxation system to provide an adequate level of funding for public enterprises such as schools and public services. 

A new tack in taxing times
April 1, 2010

AMHERST – Last week, Amherst voted to pass an override, its third in 30 years of Proposition 2½.

What are we feeling now?

First, gratitude.

Gratitude to the people of Amherst for coming together as a community to confront these hard times not of our making with a show of support and generosity for each other. Gratitude to Clare Bertrand, Andy Churchill, Baer Tierkel and the hundreds of community members who worked tirelessly and brilliantly to mobilize the community on behalf of the community.

Second, anger.

Anger at our fellow townspeople who opposed the override? Not in the least!

Disagreement and debate are the lifeblood of democracy. This year the debate was overwhelmingly reasoned, reasonable and informative. Proponents and opponents avoided scare tactics and stuck to facts. In a season of hardship, many people honestly agonized over strained household budgets.

Rather, our anger is directed at the current system of public revenue and expenditure in which the presumption – the default – is grossly inadequate funding of schools and town services. The outcome, after thousands of hours of political work by the townspeople of Amherst, is modestly inadequate funding of schools and town services. Adequate funding for schools and towns, paid for fairly, is not yet on the Massachusetts ballot.

And while many of us in the Vote Yes for Amherst movement feel great about the weekend afternoons and weekday evenings dedicated to the campaign, we can’t help feeling a sense of regret that our effort helped only to keep our heads above water, if barely. Given Proposition 2½ reliance on local taxation, and given inadequate, shrinking, and regressive state financing, there was probably no more community-minded way to spend the winter and spring of 2010 than campaigning for the override. The thousands of hours – which could have been poured into gardens, art, music, sports, family time – simply had to be spent on the life preserver.

We are exhausted. But part of that exhaustion comes from knowing that all this hard work only slows the decline of our town. We can’t mobilize to save Amherst every year in the current fiscal environment. But we can reshape the landscape. We can change the “givens.”

Which leads us to what we feel most today, and hope you will feel: resolve.

Resolve to turn immediately from fighting for survival, to fighting for a tax system that meets our common needs, and fair enough for a just democracy. Let’s turn the corner and find new energy in fighting for a progressive tax system that gives us the Commonwealth we want.

Here’s a program that is gaining traction among progressive groups across the state. Reshaping the way we pay for our commonwealth can support the towns and schools we want and our children deserve.

Let’s return the income tax on earned income to 5.95 percent, where it stood a decade ago. In 2001, as we were battered by the first recession of the new century, a referendum appealing to easy anti-tax sentiments brought the state income tax rate down to 5.3 percent. We have tried 5.3 for a decade, and it doesn’t work. Every public institution in the state – every school, college, university, hospital, community center, town hall, police station, firehouse – is in chronic crisis. We can protect lower-income households by raising the personal exemption.  Without raising taxes on families earning less than $65,000, these reforms can generate $800 million a year.

Let’s tax dividends at 12 percent, as they were taxed until a decade ago.

This pure and simple wealth tax is the kind of property tax that we can all support. It’s based overwhelmingly on ability to pay, and it taxes the enormous concentration of wealth at the very top. It can generate $500 million a year.

With a just and adequate tax system for the state, we can reduce reliance on local taxation. Local taxation is not fair between towns, and its upkeep is demanding, even in towns that can afford it.

Thankful? Angry? Resolved? What do you do if you are attracted by this program?

A coalition of organizations is forming to push this fair set of revenue changes. is gathering together organizations Friday in Boston to plot out a strategy for the near and longer-term.

We need citizens and their organizations – unions, parent-teacher organizations, citizens’ groups like Sustainable Amherst – to sign on. If you voted against the override, this is the moment to recognize that we wouldn’t need overrides if state finances were fair and efficient. If you worked or voted for the override, this is the moment to connect the dots between our struggle on behalf of town and schools and the broken state tax system.

It’s time to act on the audacious presumption that our public, shared goods, services, and space need adequate care and upkeep.

Max Page is professor of architecture and history at the University of Massachusetts Amherst and former president of the Massachusetts Society of Professors. Michael Ash is associate professor of economics and public policy at UMass Amherst and a member of Amherst Town Meeting. They can be reached at [1] and