Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Massachusetts Will Vote on Millionaire Tax in 2022

Residents will vote on the “Fair Share” amendment next year and if approved the state will impose a 4 percent surtax on household incomes exceeding $1 million. The tax increase would produce an additional $2 billion in revenue annually.

(TNS) — A proposed tax hike on Massachusetts millionaires will be on the 2022 ballot after state lawmakers Wednesday approved putting the “Fair Share” constitutional amendment up for a public vote.

If residents vote in favor next year, the state government in 2023 will impose a 4 percent surtax on household income exceeding $1 million. Massachusetts has long had a flat income tax rate of about 5 percent, and the most recent push by state lawmakers to shift more of the tax burden on wealthy residents comes as the Biden administration and Congress consider similar alternatives with federal income taxes.

In a joint session at the State House, lawmakers advanced the amendment in a 159 to 41 vote.

Lawmakers and advocates for and against the “millionaire’s tax,” including groups like Raise Up Massachusetts and Massachusetts Fiscal Alliance, are now poised for campaigns to convince voters on the issue before the November 2022 ballot.

Proponents say the tax bump on wealthier residents could rake in an additional $2 billion in revenue every year, potentially boosting the economy as the state looks to rebound from the COVID-19 pandemic and providing greater funds to education and public transit in an effort to curb inequity.
“In public polling, this proposal typically receives support from more than 70 percent of voters in Massachusetts,” wrote state Sen. Jason Lewis and Rep. Jim O’Day, the Democrats leading the charge on the amendment, in Commonwealth Magazine on Tuesday. “The reason why the Fair Share Amendment is so popular is that most people recognize that our wealthiest residents can afford to pay a bit more in taxes to help fund investments that expand opportunity and make our Commonwealth more just and equitable for all.”

On the State House floor Wednesday, Lewis said that since 1979, average income for the top 1 percent has grown at an annual rate 10 times greater than the bottom 90 percent. “A hugely disproportionate share of new income and new wealth has already gone to those who are very rich. And this is not because working people aren’t working enough.”

Workers living paycheck-to-paycheck are “tapped” out with rising costs that have not been matched with rising wages and wealth, he argued.

Conservatives and free-market think tanks point out that the state already has plenty of money — including in federal aid. They argue that taxing millionaires will wind up hurting small businesses and middle-class workers alike, and may convince wealthy residents to pack up and move out-of-state.

“[Massachusetts] voters have rejected a [graduated] tax scheme FIVE TIMES,” Massachusetts Fiscal Alliance said before Wednesday’s vote. “Today, the legislature is trying to remove constitutional protections to raise taxes on some higher than others.”

State Rep. Bradley Jones, a Republican of North Reading, told lawmakers that voters demanded a 5 percent flat tax more than 20 years ago. The “Fair Share Amendment” betrays “the trust of the voters, the consent of the governed,” he argued.

Jones added that, “I don’t think we should be putting [tax] rates in the [state] constitution.”

Other states adopted similar tax rates through statutes, not constitutional amendments, Jones argued, in part because constitutional changes can require years-long fixes.

David Tuerck, president of the Beacon Hill Institute, said during a press call Tuesday that, “We don’t have a tax revenue crisis. We don’t have an education and transportation crisis. This is the wrong tax increase at the wrong time,” Politico reported.

“Here we find ourselves once again confronting a sixth bid to amend the state constitution, another attempt to crack the flat tax which will provide the first step toward creating a graduated income tax for all,” argued the Pioneer Institute on Tuesday. “This time around, it’s deceptively dubbed ‘The Fair Share Amendment,’ but again we ask, what can be more fair than every taxpayer paying a tax on their taxable income at the same rate?”

O’Day and Lewis countered the argument that some may vacate the state due to the tax hike.

“Investments in a stronger education system and improved transportation infrastructure will strengthen our economy, expand opportunity and make Massachusetts an even more desirable place to live, work, raise a family and build a business,” they wrote. “With a 9 percent top marginal tax rate, Massachusetts would be in line with many other high-income states, including California, New York, New Jersey, Vermont, Minnesota and Oregon. Even many red states have top marginal income tax rates well above our current 5 percent rate.”

©2021 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.


From Our Partners