Voters in Massachusetts will decide this November whether to impose a surtax on millionaires.
Question 1 on the ballot, also dubbed the Fair Share Amendment, would increase the state’s revenue by levying a 4% surtax on annual income above $1 million. Those funds would be used to bolster the public education system and for the repair and upkeep of the state’s infrastructure, although the monies would be subject to appropriation by the legislature.
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var _bp = _bp||[]; _bp.push({ "div": "Brid_65766487", "obj": {"id":"27789","width":"16","height":"9","video":"1117682"} }); ","theme.0000017c-2d32-d5c4-af7f-7d77b7920000.:core:enhancement:Enhancement.hbs.enhancementAlignment":null,"theme.0000017c-2d32-d5c4-af7f-7d77b7920000.:core:enhancement:Enhancement.hbs._template":null,"_id":"00000183-ecaa-d2c9-a9e3-feba3f250000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedMassachusetts currently has a flat income tax, meaning that all residents pay 5% of their income to the government. Someone earning $80,000 per year pays 5% of that to the state, just as someone earning $8 million pays 5% of that in income taxes annually.
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Question 1 would not apply to the first $1 million that a person owns but would rather be assessed from what is earned in excess of that $1 million. For example, under current law, if a person earned $2 million in one year, he or she would pay $100,000 in taxes. If the new provision is approved, that person will pay $140,000 in total: $50,000 on the first $1 million as well as $90,000, or 9%, on the second $1 million.
If passed, the measure could haul in an estimated $1.2 billion per year in the near term, which equates to nearly 2.5% of the yearly state budget, according to the Bay State’s Executive Office of Administration and Finance. The agency said, though, that revenues could vary greatly and that taxpayers could flee the state.
Supporters of the measure, which would result in an amendment to the state constitution, argue that taxing the wealthier at a higher rate than the middle class is a more equitable form of taxation than a flat tax and that the extra funds would be a shot in the arm for Massachusetts’s schools and infrastructure.
“This is certainly not meant to be a punishment of anyone, but really about how we all invest in our communities,” Liz Speakman, an organizer for the campaign in favor of the measure, told GBH News. “And for those who have succeeded and can afford to pay a little bit more, for them to be able to help out with that investment, it’s going to just benefit everybody.”
Opponents contend that some nonwealthy residents would be unfairly saddled with the increased tax because of one-time occurrences like selling a small business. There are also concerns that some taxpayers might relocate in order to avoid the new tax.
“Small businesses are hurting,” said Dan Cence, a spokesman for the campaign opposing the plan. “They’re coming out of COVID, they have supply chain issues, there is inflation, there is a worker shortage. Heaping another, greater tax upon them — it’s just not the right time to do it.”
There have been millions of dollars flowing to both sides of the issue. Those backing the proposal have raised some $21 million, with a lot of that coming from unions, including the Massachusetts Teachers Association and the National Education Association.
Some $9 million has been raised in opposition, with funders including Suffolk Construction, Jim Davis (the chairman of New Balance), and Rand-Whitney Containerboard, according to GBH News.
Massachusetts, in years past, has had the reputation of a high-tax state, earning the nickname “Taxachusetts.” While that used to be accurate, since then, the average state and local tax burden has fallen to a more average level.
The current state and local tax burden is 11.5% of state net product, below that of states like Virginia, Minnesota, and Utah, and well below that of New York, which has the highest tax burden in the nation at 15.9%, according to the Tax Foundation.
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Question 1 joins three other questions on the ballot in Massachusetts, including ones related to illegal immigrants obtaining driver’s licenses, expanding the number of liquor licenses companies can hold, and regulating dental insurance.
