Massachusetts residents are getting their largest income tax hike in a decade under a $740 million temporary increase signed into law by Gov. Michael Dukakis Wednesday. The tax package raises the income tax rate from 5 percent to 5.75 percent for 18 months to pay off a fiscal 1989 deficit and millions of dollars in medicaid bills.

The legislature rebuffed Mr. Dukakis's call for permanent taxes in the fiscal 1990 budget, but accepted the temporary increase.

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