Tired of the partisan infighting which he says prevents Massachusetts political leaders from accomplishing anything substantive, former health care company executive Evan Falchuk took an entrepreneurial approach — he started his own party.
Running for governor under the United Independent Party banner, Falchuk has been touring the state with his message that change is possible — outside the current political structure.
“We have a political process that’s not representative,” he said, in an interview with the Banner. “That’s why I’m doing this by founding a new political party, the United Independent Party, which is based on simple ideas: they are that everyone is equal, that everyone’s civil rights have to be protected, and the government’s gotta spend taxpayer money wisely.”
Falchuk sees his candidacy as a first step in changing the political equation on Beacon Hill. If he is able to secure at least three percent of the vote in November, the United Independent Party will become a registered party in the state, opening the door for candidates to raise funds. In an Oct. 8 WGBH/Emerson College poll, Falchuk’s share of the vote had advanced from 2 percent to 5.4 percent on the heels of several candidate forums where he was able to broadcast his message to a wider audience.
Falchuk says he would tackle growing income inequality in Massachusetts by attacking what he says are the two greatest drivers of inequality in the state: housing costs and health care costs.
“The government is doing the bidding of either big companies or people with money at the expense of everyone else,” he said. “You can see lots of examples of policies that do this and that’s what gets to this point of income inequality.
“These are the two biggest drivers. They happen to create and worsen income inequality. One aspect of this that is not discussed enough is that income inequality is affecting black and Latino people more than anyone else.”
To lower housing costs, which in the Greater Boston area are among the highest in the nation, Falchuk says the state must make it easier to build new housing. A key part of that equation is to persuade suburban communities to build more by providing more funding for education. With many municipalities struggling to meet the costs of educating children, the prospect of adding more housing units is seen as a prohibitive drain on their coffers.
“The reason they don’t think it’s in their best interest is because education funding has been flat for the last decade,” said Falchuk, who advocates increasing Chapter 70 state aid for education. “The cost of it has gone up because of the cost of health care. There needs to be more money going to cities and towns for education.”
To lower the cost of health care, Falchuk says he would ban hospital mergers, which he says drive up costs, and move toward a state-imposed fee schedule to eliminate disparities in hospital costs. Limiting how much hospitals can charge would help cut down on waste, according to Falchuk.
“The studies on waste in hospitals show 30, 40 percent of spending in hospitals is wasted,” he commented. “And that’s from paper files and the repeated things that happen that are of no benefit to the patient. Let’s say you get rid of 5 percent of the waste, that’s $2 billion a year.”
Falchuk becomes animated when he delves into issues of government spending, health care and taxes, occasionally slowing down to explain the thornier issues, like the state’s flat income tax, which requires that everyone pay the same rate on their income, regardless of how much they earn. The federal income tax is progressive, meaning that the more tax payers earn, the higher the rate at which they’re taxed — a system widely thought to be more fair than the flat tax.
“We’ve got a tax code that’s got its roots back in the early 20th century,” Falchuk says. “We’ve got a constitutional amendment that requires us to have a flat tax collections system, which constrains the ability to be modern and creative in how we do our tax collections. I think that should be repealed.”
Falchuk proposes the establishment of a tax modernization commission that would propose reforms to make the tax code simpler and fairer.
“It won’t happen with the current leadership,” he says. “We need to get new people in the Legislature — independent people — so we can act on these things. If the Legislature has shown that it won’t even vote on these kinds of issues, we need to change the Legislature.”
One part of the tax code Falchuk says he would change is in the $770 million in special tax breaks the state gives to corporations.
“As a businessman, I never went to the state and said, ‘hey can you give us a break on our taxes if we hire people, but that’s basically what happens with a lot of these big tax breaks,” he said.
The problem, according to Falchuk, is that the tax breaks don’t really work. He cites Raytheon and Fidelity Investments as examples of corporations that received generous tax breaks from the state as inducements to remain here. Both corporations ultimately left the state, taking jobs with them.
Ultimately, according to Falchuk, taxes are a small factor in businesses’ decisions on where to locate their headquarters.
“Look at the biotech industry,” he said. “There’s a reason the biotech industry is consolidating in places like Boston and Cambridge. We have Harvard and MIT and all these research labs. Having access to those scientists and being able to support them and figure out how to get their things into the market, that’s just smart business for them.
“These are some of the biggest companies in the world in one of the most successful industries in the world. They make decisions for some pretty fundamental reasons. And a couple points here and there on taxes is gravy for them.
“I think the notion of giving big companies big tax breaks doesn’t make sense. It’s trying to revive an economy from 50 years ago that doesn’t exist anymore. What we need to be focused on are the things that drive the economy in the 21st century, which are small and medium-sized businesses.
“Lowering the cost of health care and lowering the cost of housing are two critical components of this. And in a state where we’re not constructing housing, there will not be sustained economic growth.”
