By Matt Murphy

STATE HOUSE NEWS SERVICE

STATE HOUSE -- It wasn't so long ago that voters in Massachusetts were routinely asked to weigh in on whether the state should scrap its flat income tax in favor of a graduated rate structure that taxes higher income earners more.

The change would require a Constitutional amendment, and each of the five times the question was posed between 1962 and 1976 and again in 1994 voters rejected it soundly, with the idea never getting more than 28 percent.

Democratic leaders in recent years have been reluctant to go down that path again, even though Gov. Deval Patrick and others have expressed interest, if not outright support, for the concept as a way to improve the "fairness" of the tax code, which they say regressively hits lower-income earners disproportionately compared to high wage earners.

But the tides could be changing with Sen. Stanley Rosenberg, a proponent of the graduated income tax, poised to be elected the next Senate president in January and a new crop of lawmakers arriving on Beacon Hill.

"I will be discussing it with my colleagues," Rosenberg told the News Service after a special Tax Fairness Commission, co-chaired by Rep. Jay Kaufman and Sen. Michael Rodrigues, recently included the graduated income tax among its recommendations.

Rosenberg has been a sponsor of a graduated income tax constitutional amendment, but the measure must be approved by two consecutive legislative sessions to reach the statewide ballot and in recent years Senate President Therese Murray has not brought the proposal, or many others that are pending, forward for votes. Come January, however, it is expected that Rosenberg will be wielding the gavel during Constitutional Conventions.

Asked about the Tax Fairness Commission including the graduated income tax in its final report - the panel voted 9-4 in favor of the idea, Rosenberg said, "I'm very excited about that."

"In the overwhelming majority of states that have an income tax it's a progressive graduated tax and I know it's been on the ballot before a number of times and was defeated each time but I think the situation has now changed to the point where people will take another look at this and see it differently as a result of the growing income inequality and stagnation of the standard of living and recognition the graduated income tax will be a fairer way of raising money for public services," Rosenberg said.

The Amherst Democrat acknowledged that it would be a fight to get a constitutional amendment approved, and said it should be difficult to change the Constitution.

Citizens for Limited Taxation, now led by Barbara Anderson, was founded in 1974 to oppose a graduated income tax plan as it was headed to the 1976 ballot, where it was defeated 68 percent to 24 percent.

"A graduated income tax is a tool to divide and conquer taxpayers, hiking taxes one bracket at a time," Anderson said in a recent release warning of a "tax trap ahead." She continued, "By targeting a single bracket, enough critical mass will never be reached for effective tax resistance. And, without legislative cooperation, a constitutional amendment is forever."

Steve Aylward and Marty Lamb, the organizers behind a proposed ballot question to repeal the indexing of the gas tax to inflation, also criticized the commission's characterization of a graduated income tax as "fairer."

"When has Beacon Hill been fair to the taxpayers? Is it fair that the gas tax is automatically going to increase every year without a vote?" Aylward said. "Are these lawmakers forgetting that the people have rejected a graduated income tax multiple times? Their conclusions are completely disrespectful to the voters of the Commonwealth."

Lamb said the Legislature should stop looking for ways to raise taxes and start identifying savings.

Sen. Jamie Eldridge, an Acton Democrat and fellow sponsor of the graduated income tax amendment with Rosenberg, said he was "pleasantly surprised" to see the recommendation included in the commission report.

"Speaking on behalf of many fellow Democrats, I think there is recognition that we really need to take a look at it next session," Eldridge said. 

Eldridge said the fact that voters last rejected the idea in 1994 shouldn't dissuade lawmakers from reconsidering now. "It's the job of the Legislature to revisit issues and an important thing to keep in mind is that property taxes have skyrocketed in Massachusetts and we have passed taxes the last few years, it just tends to be regressive taxes. We need to do it in a more fair manner," he said.

The fate of a graduated income tax could depend, in large part, on the predispositions of the new House and Senate members elected in November, as well as who becomes the next governor and the attitudes of the public.

Eldridge wouldn't speculate whether Murray's departure from the Senate and Rosenberg's expected elevation to president might create a more friendly atmosphere at the State House toward a graduated income tax.

"I'm really not sure at this moment. Our Senate president is Therese Murray right now so I'm not thinking about anything else," Eldridge said.

While Rosenberg might be leading the Constitutional Convention next year, he won't be able to get anything done without support in the House. The House has 160 members compared to 40 in the Senate. During a Constitutional Convention, the branches sit jointly in the House chamber.

Rep. Patricia Haddad, a Somerset Democrat and speaker pro tempore, said she knows Kaufman is "very high" on the idea and said the Revenue Committee chairman will have to sell her on it to get her vote.

"My opinion of the graduated income tax? I don't actually have one. I try not to put my nose in where I don't know enough about it. I think a lot of people think it's a good idea. I think I would have to wait to hear the debate," Haddad said.

As for the level of support in the House, Haddad said most will want to take their time to weigh the proposal.

"I'm sure there are people over here that are already very in favor of it, but I think there's a process that people will have to be sold on it. Part of my issue is I really am very careful about changing the Constitution so just the fact that it has to be an amendment means we have to spend an awful lot of time talking about and getting the pros and cons," she said.