Local income tax could slash property taxes
State Representative Jen Benson and Chairman of the House Joint Committee on Revenue Jay Kaufman address a group during the tax policy and revenue discussion Dec. 1 in Volunteers Hall. (Photo by Lisa Aciukewicz)
Two Harvard residents have gotten the attention of two state legislators with their idea to institute a progressive town income tax whose revenue would be used to slash property taxes.
The idea of the 2 percent tax was proposed by Bruce Leicher, chairman of the Pond Committee, and Stu Sklar, a member of the School Committee, at the Oct. 26 School Committee meeting. Representative Jen Benson was at the meeting, and in response to their proposal, she hosted the Tax Policy and Revenue Discussion at the Harvard Public Library on Tuesday. Representative Jay Kaufman, chairman of the House Joint Committee on Revenue, also attended.
Leicher and Sklar believe the income tax could reduce property taxes by as much as half by raising approximately $7.5 million. Sklar stated Tuesday that the premise of the idea is that 1 percent of the population of Harvard is responsible for 20 percent of the aggregate wealth of the town; in other words, a plan could be structured so that most residents’ town income tax bill would be more than offset by a reduction in property taxes. Sklar pointed out that the measure would, most importantly, address the problem of residents with lower or fixed incomes leaving town because of rapidly increasing property taxes.
The average Harvard property tax bill is approximately $8,320 annually.
To demonstrate the idea, Leicher assumed an average tax bill for a property in Harvard to be $8,500. He pointed out that, for a family whose income was $25,000 per year, the hypothetical $8,500 property tax represented 34 percent of the family income, whereas, for a family whose income is $250,000, a $8,500 property tax is 3.5 percent of the family income. The progressive tax would address this inequity.
Jonathan Keyes, chairman of the Town of Concord’s Local Option Local Income Tax Committee, attended the meeting and stated that the Concord Board of Selectmen would be offering a warrant article describing a similar idea for that town’s consideration at their spring Annual Town Meeting.
Rep. Kaufman began the meeting with a presentation on the role of government and taxes and questioned whether the current tax system in Massachusetts reflects the social and economic value systems of the state’s citizens. He said he believes that the system needs to be restructured, and is looking for ideas such as Leicher’s and Sklar’s.
Leicher pointed out that the progressive tax idea may have constitutional problems, but Kaufman said the idea is worth exploring.
Also at the meeting, Kyle Keady, Shirley’s town administrator, stated that legislators could help relieve towns’ fiscal problems by removing inefficient and unfunded mandates—directives that towns must pay for without state aid. Benson responded that she and other legislators were compiling a list of such mandates and would be acting on them as soon as possible.
