In a lively debate at the Kennedy School's ARCO Forum last night, four panelists discussed two proposed Massachusetts ballot initiatives that would create a graduated state income tax.

Currently, Massachusetts has a 5.95 percent flat income tax. Ballot question 6 would establish a graduated tax, with higher income brackets for those who earn higher wages and lower brackets for those who earn less.

Question 7 would set three marginal brackets for the graduated tax at 5.5 percent, 8.8 percent and 9.8 percent, and would create a new tax filing category for single parents.

Mitchell Kertzman, chair and chief executive officer of PowerSoft Corporation in Burlington and a supporter of the initiatives, said that he was promoting the questions because of "fundamental issues of fairness."

Kertzman, a multi-millionaire, said that he thought the graduated tax would bridge the gap that has developed in the last decade between the middle class and the rich.

"The rich have gotten richer, but the middle class has been standing still," Kertzman said. "There is an inequality of income hurting the economy of America."

But one of the two panelists who opposed the ballot initiatives raised said a graduated income tax would hurt small business.

"Virtually every small business in this state is going to be pushed into higher tax brackets," said Mike Widmer, president of the Massachusetts Taxpayers' Foundation.

The other panelist arguing against the propositions said that the measures were not designed to ease the tax burden.

"We've never seen a tax cut we didn't like," said Barbara Anderson, executive director of Citizens for Limited Taxation. "Obviously, this is not a tax cut."

But Jim Braude, campaign director for the Campaign for Guranteed Tax Relief, argued that "the worst graduated income tax is better than a flat tax."

Both sides offered many statistics to support their views.

At one point, however, the debate turned to personal attacks when Anderson said to Kertzman and Braude, "You don't understand how the Legislature works. You are extremely naive about what politics is all about. The Legislature lives to raise taxes."

Some audience members, such as Jay Podgurski, a second-year Kennedy School student, said they felt that the panelists missed some major issues and quibbled on minor details instead.

"They're really nasty to each other," he said. "They did not even address important issues like a more efficient tax system."

Jim Hines, associate professor of public policy at the Kennedy School, moderated the debate.

Mark Leccese, political editor and state bureau chief for the Cambridge Tab, and Vicki Ogden, publisher at Cape Cod Community Newspapers, asked the panelists questions.