Tax Analysts Blog

Will a Graduated Income Tax Sink Martha Coakley?

Posted on Oct 27, 2014

If you asked voters to identify the state most associated with the values of the Democratic Party, most probably wouldn't name a state at all. They would say Massachusetts, which is technically a commonwealth. But for all its dependability in presidential elections (it hasn't supported a Republican since Reagan and, before that, Eisenhower), the commonwealth has a habit of surprising in other campaigns. Martha Coakley, the Democratic candidate for governor, is finding that out, as she now trails Republican Charlie Baker in most polls.

A Baker win would hardly be a shock. Massachusetts has elected several prominent Republican governors in recent years (think Mitt Romney, William Weld, and Paul Cellucci). And Coakley is an extremely weak candidate. It was her loss to Scott Brown in a Senate special election in 2009 that nearly derailed healthcare reform. But what is surprising is the role that taxes are playing in the race. It seems that even Massachusetts has had enough of tax-increase and soak-the-rich rhetoric.

In an October 21 debate, Coakley said she wanted to explore ways to introduce a graduated income tax. Massachusetts currently uses a flat income tax, and a graduated tax would almost certainly raise taxes on wealthier taxpayers. Less than 24 hours later, she was backtracking on that proposal, as her ratings continued to flag in the polls. The day after the debate, she said she hoped taxes would go down during her administration, distancing herself from incumbent Deval Patrick, whose $2 billion tax bill that would accomplish some of the goals of a graduated income tax without passing a constitutional amendment wasn't even taken up by the Democrat-dominated legislature. Coakley’s message had been that revenues were needed for investment in infrastructure, but now she seems to be campaigning just on the investment part, hoping voters will forget where those revenues would have to come from.

A graduated income tax has never been popular in Massachusetts. Patrick is the first Democratic governor to push seriously for it since voters rejected a constitutional amendment in 1994. However, rate reform has gotten support in recent years as a way to protect lower-income taxpayers from the revenue increases needed to fund the Democratic agenda. The likely incoming president of the Massachusetts Senate has said he would like to see his colleagues seriously discuss the issue. That explains why Coakley even brought the tax up in the first place. (That, and she was pressed by Baker after a confusing answer at the September debate between the two candidates.)

Baker's surge in the polls might have more to do with Patrick's unpopularity and Coakley's various missteps, but his position on taxes is hardly a secret. The former Weld and Celluci Cabinet member wants to cut taxes, and he's pledged not to raise them. While not ruling out fee increases as a means to balance the budget, he pointed out that Coakley "has stood idly by for the past seven years as taxes on gas, sales, cable TV and a host of other services - property taxes, fees, registry fees, local fees - have gone up across the Commonwealth." Voters are certainly aware of where Baker stands on the revenue issue.

Coakley might still win. The polls show her within the margin of error (although Baker has increased his lead by 4 points since the debate). But her attempt to distance herself from Patrick and her flip-flop on the graduated income tax shows that the soak-the-rich rhetoric that Obama employed so effectively in 2012 against Romney, a former Massachusetts governor, isn't playing nearly as well.

Read Comments (6)

david brunoriOct 27, 2014


Excellent post! Coakley is a terrible candidate who has a hard time connecting
with voters. But you are right in thinking the tax issue will play an important
role in the election. For decades, the commonwealth had a bad reputation for
high taxes. There was of course Taxachusetts and a lot of folks shopping in New
Hampshire. I would not be surprised if folks voted their pocketbooks in
Massachusetts next week.

edmund dantesOct 27, 2014

"Taxachusetts" has a markedly lower per capita tax burden and an earlier "Tax
Freedom" day than its neighbor CT, my state, which has the highest per capita
tax burden in the country, per the Tax Foundation. People routinely drive to
Mass. to save 50 cents a gallon on gas. I wish we had someone running for
governor promising to lower taxes, but we don't. The Republicans just aren't
very bright in this state, to put the case diplomatically.

I'm pretty sure William Weld and Mitt Romney should get credit for retarding
the growth of taxation in the Commonwealth. If they have any brains or
economic sense the Bay Staters will reject Coakley.

vivian darkbloomOct 27, 2014

edmund dantes,

When you say that CT has the highest per capita tax burden in the country, you are likely referring to state, local and *federal* taxes. The governor does not have control over the latter. If one considers only state and local taxes, NY and MD share the "distinction"of having a higher per capita tax burden than CT.

And, if I am not mistaken, CT also has the highest per capita *income* in the country. Does it make any sense that a state with the highest per capita income would collect (one of) the highest per capita in taxes?

That's not to say that raising even more taxes is good for the folks of CT. If she gets her way, it is likely you will be able to say to NY and MD "We're
number 1".

edmund dantesOct 28, 2014

vivian, point well taken.

with all that income, you'd think that there'd be less need for state
government spending, wouldn't you?

vivian darkbloomOct 28, 2014


I was expecting you would correct me on my error--you apparently live in CT and
Coakley is, of course, running in Massachusetts. Still, I bet if she did have
her way, you would be paying more!

edmund dantesOct 29, 2014

vivian, your comments are always so incisive and on-target that I would
consider making a correction to be pointless nit-picking. keep 'em coming!

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