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Dukakis: Biggest Tax Raiser And Tax Cutter In Massachusetts History

May 30, 1988 GMT

BOSTON (AP) _ Gov. Michael Dukakis is the biggest tax raiser and tax cutter in Massachusetts history, a dual distinction that puts him in a curious position as a presidential candidate.

The likely Democratic nominee can accurately lay claim to the tax-cutter title. But certain Republican nominee George Bush can just as correctly claim Dukakis is a tax-raiser.

Dukakis talks frequently of cutting taxes while mopping up Republican deficits, a pitch aimed at voters worried about the federal deficit but mindful of Democrat Walter Mondale’s frank 1984 statement that he would raise taxes if elected president. He wasn’t.

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In 10 years as governor, Dukakis has for the most part been reluctant to raise taxes, although he has done so to the tune of $500 million, and equally reluctant to cut them, although he has signed tax cuts totaling nearly $710 million.

″He’s very, very gun shy about tax hikes and rather leery about tax reductions,″ said Richard Manley, executive director of the Massachusetts Taxpayers Foundation.

If elected president, Dukakis has said new taxes would be a last resort. Bush has backed away from an early campaign promise not to raise taxes and adopted a position similar to that of Dukakis, seemingly making taxes a non- issue in the fall campaign.

But Bush supporters are closely watching the Massachusetts Legislature, where lawmakers are on the verge of sending a $110 million tax increase package to Dukakis’ desk.

″They have just spent themselves into a fiscal mess,″ said Barbara Anderson, executive director of Citizens for Limited Taxation, an anti-tax lobby founded to oppose Dukakis’ tax policies. ″So, true to form, the first recourse is a tax increase.″

Dukakis became the biggest tax raiser in state history in 1975, when in his first year as governor he broke a ″lead pipe″ campaign promise not to raise taxes.

After months of refusing to break the pledge while the state’s fiscal crisis worsened, Dukakis relented and the Legislature approved nearly $500 million in new taxes. They included increased sales, cigarette, liquor and estate taxes and a 7.5 percent income tax surcharge.

″Taxachusetts″ became the leading nickname for a state with a struggling economy and an unemployment rate hovering near 12 percent.

Missouri Rep. Richard Gephardt tried to use those tax hikes against Dukakis during the primary campaign. Bush aides say the vice president is considering a similar attack.

But at home, even Dukakis’ enemies defend him on the 1975 tax hikes, widely blamed for his defeat in 1978.

Dukakis inherited a $530 million deficit from Republican Gov. Francis Sargent and the state was in danger of defaulting on bond issues.

″The alternative was to start managing the budget, but in all fairness he didn’t have time,″ said Anderson, the governor’s fiercest critic on tax and spending policy.

While Dukakis was out of office from 1978-1982, there were minor adjustments in the state’s meal and gasoline taxes, and voters approved a major property tax cap.

Back in office in 1983, Dukakis, who opposed the property tax cap, tried unsuccessfully to amend it so that city councils, not voters, would have authority to override it.

After losing that battle, Dukakis proposed business taxes totaling up to $300 million to fund infrastructure projects, but House leaders refused to support him.

In 1984, a legislative election year, Dukakis vetoed a four-year, $600 million tax cut package that would have increased personal exemptions and halved taxes paid by senior citizens on unearned income.

At the time, the state had a surplus approaching $300 million and its budget was growing by nearly $1 billion a year.

But the booming economy and growing surplus sparked a tax-cut drive Dukakis was powerless to stop.

Anderson’s group collected enough signatures to place before voters an initiative to repeal the surtax and to impose a state tax cap.

Dukakis, who had consistently opposed repealing the surtax, agreed to do so and also signed - 12 days before the 1986 election - additional tax cuts increasing personal exemptions and raising the maximum income for no-tax status. The governor, re-elected in a landslide, opposed the tax cap referendum but it was narrowly approved.

″We thought we had died and gone to heaven,″ said Anderson.

To illustrate the change, look at the state tax burden. In fiscal 1977, Massachusetts residents paid $177 in state and local taxes and fees per $1,000 of income, 9 percent above the national average of $162. In contrast, in fiscal 1986, the Massachusetts tax and fee burden was $150 per $1,000 of income, 5.7 percent below the national average of $159.

Although Dukakis opposed the majority of the tax cuts, he now touts them in campaign speeches and ads.

Anderson and other critics are crying foul.

″In every instance he opposed cutting taxes until he was carried kicking and screaming with his feet to the fire and forced to do so,″ said Royall Switzler, a former House Republican leader. ″What he’s saying now is all blue smoke and mirrors.″

But others say Dukakis has been careful not to claim direct responsibility for the tax cuts.

″He took the heat for the 1975 tax hike that wasn’t his fault so why shouldn’t he take some credit for the tax cuts?″ said Manley.

″He’s a guy who has signed tax cuts and proposed tax increases,″ said Martin Linsky, a Republican who served with Dukakis in the Legislature in the 1960s and now teaches at Harvard’s John F. Kennedy School of Government.

″I think the line between putting the best face on things and misrepresentat ion is not a line of science,″ Linsky said. ″It’s a line of art and that’s what the campaign will be about.″

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