While reading some of the past letters to the editor, I’ve concluded that people seem to miss a point. Question 1 would reduce the state personal income tax rate to 2.65 percent for all categories of taxable income for the tax year beginning on or after Jan. 1, 2009, and would eliminate the tax for all tax years beginning on or after Jan. 1, 2010. The personal income tax applies to income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of “S corporations” as defined under federal tax law.
Now the key word is “personal.” If Question 1 passes, Massachusetts will still have a business income tax. Corporations will not be exempt from a state income tax. This is a similar situation to New Hampshire, which does not have a personal income tax but does have a business income tax.
Their idea in N.H. seems to be to draw in retail business by not having a sales tax and then collect tax revenue from the profits made by the retailers through a business income tax. However, the point is well made in the editorials—some state aid will probably be lost, so local real estate taxes would probably increase. If Question 1 passes, Harvard should look at how to attract more businesses and possibly set a different tax rate for businesses and residents.
Joe Dzekevich
Withington Lane
