Friday, February 16, 2007


Town governments here in Massachusetts are getting squeezed.

The culprit? Inflation and proposition 2 1/2. If a local government's costs rise faster than 2.5% per year, then they're stuck with three choices: cut costs, ask the taxpayers for an override, or find another source of revenue besides property taxes.

If I'd been old enough to vote in 1980 when proposition 2 1/2 was passed, I probably would have voted for it-- it seems like a reasonable way to keep government growth in check. Any organization has a natural tendency to want to get bigger over time, and government is no exception. The real difference between government and Wal-Mart is that if I don't like what Wal-Mart is doing I can refuse to give them any of my money...

... anyway, I probably would have voted for prop 2 1/2 because it seems like a good idea to ask taxpayers how many (and which) government services they'd like to pay for every few years.

Unfortunately, it looks like proposition 2 1/2 actually had unintended consequences:
"It takes time for various levels of government to institute and implement changes, but following a brief lag, California and Massachusetts began to make up those lost revenues, largely through rapidly growing non-tax fees and charges. During a period of "tax revolt," these revenue sources were both less constrained and less visible to voters than taxes."
From: A tale of two tax jurisdictions: the surprising effects of California's Proposition 13 and Massachusetts' Proposition 2 1/2 - property tax

So now taxpayers are getting squeezed. We're paying more, have less control than we did before, and have a more regressive system for paying for a bigger government (poorer people generally own less expensive property, so pay less in property taxes-- but fees are generally the same, no matter how wealthy you are).

The system is broken. We need to work towards getting more direct control over our tax dollars. Instead of sending most of my tax dollars to the federal and state governments, I should be sending most of my tax dollars to where they will do the most good, and where I can see that they're being spent wisely-- to my local community.

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