BOSTON >> A proposed constitutional amendment calling for what's been dubbed the "millionaire tax" has cleared a key legislative hurdle.
The House and Senate voted 135-57 Wednesday in favor of advancing the 4 percent surtax.
Under the proposal, individuals with annual incomes above $1 million would be subject to the tax. The higher tax rate would only apply to that portion of income over $1 million. The current income tax rate is 5.1 percent.
Supporters say it would raise money for education and transportation, generating an extra $1.9 billion in 2019. Critics argue it would hurt the state's business climate and drive away jobs.
The measure must receive the backing of at least 25 percent of lawmakers meeting in a joint constitutional convention during two successive legislative sessions to secure a spot on the ballot.
That means the proposed amendment must come up for a second vote during the Legislature's 2017-2018 session. The earliest it could go before voters is November 2018.
Rep. Jay Kaufman said the amendment would create a fairer tax policy.
He said lower income residents now end up paying a higher percentage of their household income in taxes than the state's wealthiest residents — in part because of a 1917 constitutional amendment that said the state must impose uniform tax rates.
"We have a classic regressive tax system," the Lexington Democrat said. "Anything that we do to raise revenues for education, transportation or any other need for that matter would disproportionately impact those who are least able to afford it while continuing to favor those who are most able to afford it."
Sen. Bruce Tarr called the amendment a way to push a graduated income tax. Past efforts to create a graduated income rate in Massachusetts have been rejected by voters.
"There is a bit of a divide and conquer nature to what we're seeing here," the Gloucester Republican said. "How easy it is to say let's identify that group of people and make them pay for it because they must be rich because they earn more than $1 million."
Tarr said lawmakers should seek an opinion from the Massachusetts Supreme Judicial Court to see if the question passes constitutional muster, noting the constitution gives lawmakers the power to appropriate money.
Supporters of the proposal say that the extra tax dollars would still be subject to appropriation by the Legislature.
Republican Gov. Charlie Baker has said he's generally opposed to tax hikes.
"We don't think we should be raising taxes on anybody," Baker told reporters Monday.
While there are many millionaires in Massachusetts — about 12,600 as of the 2013 tax year — that's a tiny slice of the state's population of more than 6.7 million.
Many of those high earners are clustered in a relatively small number of wealthier communities.
There were about 491 millionaires in Weston, a community with a population of less than 12,000. That's far more than the number of millionaires in the state's second and third most populous cities — Worcester and Springfield.
Those two cities, with a combined population of about 336,000, had about 55 millionaires.
Based on a per capita basis, Weston had the highest proportion of millionaires, about 43 per 1,000 residents, followed by Dover (34), Wellesley (25), Lincoln (19), and Manchester (16).