MA Question 1

The Massachusetts State Income Tax Repeal Initiative, aka Question 1, will end the MA state income tax if passed (in 2010, after becoming 2.65% in 2009; it's currently 5.3%). At first glance, this seems like an obvious liberal/conservative split: conservatives want to cut taxes, and liberals don't. But I saw an ad for voting no that made me consider voting yes: it pointed out that if passed, it would cause property taxes to rise (as opposed to increasing the sales tax, or cutting spending, which is what the Libertarians who sponsored this question really want). Is that such a bad thing? Which is better, an income tax or a property tax? I feel like a property tax is more progressive, because homeowners are probably more wealthy than those whose income is greater than their exemption + deduction. Also, I think it would be better to reward labor over ownership. In the short term, higher property taxes will hurt people who are already suffering from the mortgage crisis (and also further depress the housing market), but I don't think that's a strong argument against it. In the longer term, it would hurt retirees whose homes are fully paid off and who don't earn income, and I'm not sure what I think about that. What are some other arguments for and against?