by Blair Boyd and David Albrecht
At a Republican debate in Dearborn, Michigan, former governor of Massachusetts Mitt Romney got into a heated discussion with former mayor of New York City Rudolph W. Giuliani. The controversy centered on the issue of the handling taxes during each candidate’s time in office. Giuliani criticized Romney, saying that per capita taxes and spending under Mr. Romney had increased while per capita taxes and spending under him as mayor had fallen. Romney responded by saying,
“It’s a nice line, but it’s baloney. I did not increase taxes in Massachusetts. I lowered taxes.”So who is right in this squabble? We look at the context of taxes and fees in Massachusetts.
While this statement is literally true in the sense that he did not “raise taxes”, he did take other measures which can be interpreted as an increase in taxes. These measures included: raising fees upwards of $400 million by increasing costs for getting married, buying a house, bringing a case to court, and using a public golf course. Romney also quintupled the per gallon delivery charge for gasoline.
In addition to raising multiple fees, Romney also raised more than $300 million by closing so-called corporate loopholes, what the business community considers the same as a tax increase.
According to John Berthoud, president of the National Tax Payers Union, “Closing tax loopholes and not cutting rates concurrently—that’s a tax increase.”
Eric Fehrnstrom, a spokesperson for Governor Romney countered this concept of closing loopholes by stating that they were more about tax enforcement than tax increases. He goes on to define one of those loopholes by saying,
"The biggest loophole closing involved banks that were calling themselves real estate companies in order to avoid bank taxes. Those were the types of abuses we stopped. That's called tax enforcement."Steven Slivinski, director of budget studies at Cato agrees with the business side of the loophole concept.
“Romney’s people are trying to spin this by saying he kept his ‘No new taxes’ pledge. I guess if you consider only personal income taxes and sales taxes, he’s within bounds. If you take a broader view, he is not.”Lesson: Former governor Romney has sugarcoated his record a bit, only presenting one angle to how he handled taxes in the state. He approved of policies that in the public eye might not be considered the same as tax increases, but anti-tax groups beg to differ. We leave it up to your judgment whether closing loopholes equates to raising taxes.
