Backers, foes of 'millionaire tax' make case at Statehouse
BOSTON >> Supporters of a proposed "millionaire tax" ballot question urged Massachusetts lawmakers Tuesday to back the measure, saying the extra revenue would help pay for public schools and transportation improvements.
The proposed amendment to the Massachusetts constitution calls for an additional tax of 4 percent on people with annual incomes of $1 million or more. The higher tax rate would only apply to that portion of income over $1 million.
The current income tax is 5.1 percent.
The proposal was the subject of a public hearing Tuesday before the Legislature's Revenue Committee.
Backers said the proposed amendment will generate an extra $1.9 billion in 2019.
If approved, the additional revenue — subject to appropriation — could only spent on "public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation."
Because it proposes a change to the state constitution, the question must win the backing of 25 percent of state lawmakers in two successive sittings of the Legislature. That means the earliest it could appear on the ballot is November 2018.
Critics, including the conservative-leaning Beacon Hill Institute, said the added tax would be bad for the state's economy.
Institute director David Tuerck said if voters adopt the measure, it could cost the state more than 9,000 private sector jobs and $405 million in disposable income.
He also said the amendment would raise about $1.5 billion in extra revenue, less the nearly $2 billion estimated by supporters.
"Furthermore, it will set the state for future, even more damaging tax increases and resulting economic losses," Tuerck said.
Under the proposed amendment, the $1 million threshold would be adjusted each year to reflect any increases in the cost of living based on the same method used for federal income tax brackets.
Supporters of the proposed constitutional change released a statement Tuesday signed by 71 economists in Massachusetts endorsing the measure.
"Currently the highest income one percent of taxpayers in Massachusetts pays a smaller share of their income in state and local taxes than the other 99 percent," the statement said. "Requiring the highest income residents to pay a higher state tax rate on their income over $1 million is, then, a fair way to pay for sustained investments in the human and physical foundations of our economy."
The statement also said the higher tax rate of 9 percent on income over $1 million is similar to rates on upper-income earners in other states including New Jersey, New York, Vermont, Iowa, Oregon, Minnesota, and Washington, DC, but less than the top rate of 13.3 percent in California.
The question is being pushed by Raise Up Massachusetts, a coalition of labor unions and community and religious groups that successfully supported a raise in the minimum wage and guaranteed sick time for all workers in Massachusetts.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.