Upcoming vote on tax proposal

Update: June 18, 2018

The SJC found this proposal unconstitutional and it will not appear on the ballot after all.

Last week, the legislature heard testimony on a voter initiative to raise the income tax on people earning over one million dollars.

The Proposal

The proposal, brought forth by a coalition of advocates for public services, reads as follows:

To provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes. In addition to the taxes on income otherwise authorized under this Article, there shall be an additional tax of 4 percent on that portion of annual taxable income in excess of $1,000,000 (one million dollars) reported on any return related to those taxes. To ensure that this additional tax continues to apply only to the commonwealth’s highest income residents, this $1,000,000 (one million dollar) income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets. This paragraph shall apply to all tax years beginning on or after January 1, 2019.

It’s worth picking that language apart carefully. As to the new tax:

  • It only applies to your income over $1,000,000 after all deductions and exemptions on your tax return.
  • That $1,000,000 will be adjusted for inflation to avoid bracket creep.

As to how the money can be used, it can only be used for:

  • quality public education and affordable public colleges and universities;
  • repair and maintenance of roads, bridges and public transportation.

In other words, it could be used for Chapter 70 aid for local schools and Chapter 90 aid for local roads — local government would benefit.  And it could also be used for state roads and public transit, but only for repair and maintenance, not new projects.  And it could be used to support public colleges — for example to reduce tuition.

The proposal is for a constitutional amendment, so, if approved by the voters, it could not be changed by the legislature.  No one needs to be concerned about a bait and switch.

The Process

The procedure for a constitutional amendment through the ballot initiative process is as follows:

  1. A petition signed by 10 original petitioners is filed with Secretary of state (done last year).
  2. The Attorney General reviews and approves the petition (done last year).
  3. The petitioners gather signatures adding up to 3% of the number of votes cast for Governor in the last election — 64,750 in this case (done last year).
  4. The legislature considers the petition — conducts hearing and possibly votes in a joint session on it.
  5. If the legislature does not bring the issue to a vote in the session or less than 50 legislators vote for it, it dies.
  6. If it gets more than 50 votes in two successive legislative session, then it goes in the ballot in 2018.
  7. The people vote for or against it in November 2018.

We are now in step 4 of the list above.  I will certainly vote for the petition as a legislator and will also speak up to make sure that we do not fail to take it up.  I absolutely feel that the people should have the chance to consider this carefully-crafted petition.

The Merits

I absolutely support increased spending on local education and on the maintenance of our transportation system.  In 17 years of state and local elected service, I have seen again and again that we are failing to do all that we should for our children, especially in poverty communities, and failing to maintain our infrastructure.  The proposal sets in stone that the funds raised can only be used for these purposes.

I have nothing but respect for those who are financially successful.  I feel that people in the private sector are, in general, rewarded for the contributions that they make and that most people earning over $1 million in a year (roughly the top 1/4 of 1 percent) have made huge contributions — whether as brain surgeons, as entertainers, as innovators or as executives.

But I do feel that  it takes not only hard work, discipline and creativity, but also good fortune and a supportive environment to make big contributions.  It is entirely appropriate for people who are fortunate enough to be able to make big contributions to pay proportionately more in taxes.

The only real reservation that I have about the proposal is whether it will send a discouraging message to high earners and influence their decisions to come to or remain in Massachusetts.  However, it seems modest enough that it is unlikely to do so.

The new top-earner rate will be 9%, roughly the same as or less than the top rate in states that we compete with. California, our main competitor for innovation talent, has a top rate of 13%.   New York and New Jersey, perhaps our top competitors for executive and financial talent are just under 9% and Connecticut is at 6.7%.  After federal taxes, the effective new top rate for high earners will be only roughly 5.5%.

The broadest and most rigorous study of the impact of taxation on mobility of the high earners (based on a huge database of federal tax returns) suggests that higher state income taxes do have an impact, but only a very modest impact.  Most people who are earning a lot of money are doing so in a particular business or institutional setting that they do not wish to leave.  The people most likely to move are young, low-income earners who need to find new opportunities.  Also, a lot of wealth tends eventually to go to Florida, a low tax state, but also a state with warm winter weather.

Bottom Line

Barring some finding of a fatal technical defect in the proposal — which I do not foresee — I am fully committed to vote to put the proposal on the ballot and ultimately, you the voters will decide its fate.  So, I am not so much asking for input as I often do.  But, I do think it is important for people to start thinking about the question and I will be very interested in your thoughts.

FAQ in the comments below:

Why is a constitutional amendment required for this?

The original constitutional amendment that authorized the income tax at “uniform rate” — that has been interpreted to bar a progressive income tax. The full text reads as follows:

Article XLIV.Full power and authority are hereby given and granted to the general court to impose and levy a tax on income in the manner hereinafter provided. Such tax may be at different rates upon income derived from different classes of property, but shall be levied at a uniform rate throughout the commonwealth upon incomes derived from the same class of property. The general court may tax income not derived from property at a lower rate than income derived from property, and may grant reasonable exemptions and abatements. Any class of property the income from which is taxed under the provisions of this article may be exempted from the imposition and levying of proportional and reasonable assessments, rates and taxes as at present authorized by the constitution. This article shall not be construed to limit the power of the general court to impose and levy reasonable duties and excises.

How much revenue will it generate?

The Department of Revenue has produced an estimate for this proposal. They estimate $1.9 billion in 2019 dollars. They have the full database of tax returns available to them, so they have a good idea. Of course, the estimate does depend on how the economy is doing and that is unpredictable. $1.5 billion seems like a safe low end estimate. Massbudget has summarized the DOR analysis here.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

100 replies on “Upcoming vote on tax proposal”

  1. I am of two minds about this proposed constitutional amendment.

    On the one hand, I have long believed that the Commonwealth isn’t taking in enough money in income tax revenue to be able to support the services that we want and need, and that a graduated income tax is the best way to fix that problem. So from that point of view, I am supportive of a constitutional amendment to enact a graduated income tax on high-income residents.

    On the other hand, I have two concerns with the structure of the proposed amendment:

    1. There should be more than two tax brackets. People who make five million, or ten million, or a hundred million dollars in a year can afford to pay a lot more than 9% in taxes, and they should. I will resist the urge to expound at length about why that is so. The people who agree with me don’t need convincing, and the people who don’t probably won’t be convinced by anything I could say.

    2. Education and transportation are not the only critical services provided by our state government, nor are they the only critical services that are in dire need of increased funding. I am highly uncomfortable with passing a constitutional amendment which ties the state’s hands from addressing future needs, as this one does. We already did that once when our state constitution prohibited a graduated income tax in the first place; if we’re going to undo that, then we should undo it for real, all the way. The increased revenue should go into the general fund for any purpose, not be earmarked.

    On the gripping hand, however, I understand that the legislature has already tried (three times, I think?) to amend the state constitution to allow for a graudated income tax, and the voters have rejected all three attempts. I assume that the reason why this amendment is worded so simply — hence adding only a single tax bracket — and limited to education in transportation, is that the sponsors of the referendum believe that this language is all that they will be able to convince enough voters to ratify. If my assumption is correct, then I will support this referendum even though I don’t think it goes far enough.

  2. Thank you for voting to put the proposal on the ballot. I hope it (and other ways to raise the money that our state needs to fund world-class schools, transportation, and other public services) will have your full support.

    1. 1. Past experience in Massachusetts and experience in other states does not support that concern.

      2. Massachusetts, like many other states, requires income tax to be paid for income earned in Massachusetts, even for people whose legal residence is elsewhere, so people working in Massachusetts can’t use legal dodges to get out of paying their fair share of Massachusetts income taxes.

  3. Thank you for your intention to support this amendment. We face a problem of chronic under-investment in our schools and our infrastructure, which gets worse each round of cuts. The Fair Share amendment will provide the resources to start investing in our communities and our future again.

    Those who make $1+ million were only able to achieve their wealth because of the foundation that the state built for them: schools that create an educated workforce and an infrastructure that facilitates the movement of goods and services. They have benefited the most and should contribute more.

    The Fair Share amendment also offers an opportunity to help reduce the growing inequality that is a problem in our state (especially the Boston region) and throughout the country.

  4. Of course, I’m 100% behind this measure. We middle class and poor create the wealth of millionaires. They use our roads, bridges, police, fire rescue, courts and laws. They owe this country more than any of us because they’ve gotten more out of it than any of us.

  5. Come on! Really?!
    We know you can’t honestly promise that the new taxes will be appropriated to “quality public education and affordable public colleges and universities; repair and maintenance of roads, bridges and public transportation”

    Please don’t try to feed me that bull@#$%!

  6. I am a high earner and support higher MA taxes on high earners. Your assessment that raising the tax would not affect my mobility is correct. I do know some other people who live in NH and work in MA, but they are already there. Those of us who live in MA are unlikely to leave.

    That much said, I would prefer if the bill allowed for more than educational support and road infrastructure maintenance. I would like to support new public transportation projects, pervious pavement projects, research into addiction recovery, etc. I am sorry that the bill is so limited and I don’t think that it adequately foresees future necessary expenditures. Why limit spending at all?

    Furthermore, perhaps because I am not familiar with the MA state constitution, but if the proposed graduated tax is to contain only two brackets, that seems inadequate (in MA, is it really necessary to pass a CONSTITUTIONAL amendment to change tax rates? That seems a rather severe threshold. I’d actually try to change *that* to allow more flexibility).

    1. As I noted — and Will confirmed — in my earlier comment, the reason why the proposed amendment limits what the money is allowed to be used for is because otherwise people won’t vote for it.

      The Legislature recognizes the need for a graduated income tax. They’ve tried — three previous times, I believe — to enact a constitutional amendment allowing for a graduated income tax. All three times, the people voted the amendment down when it went to referendum.

      This time, they’re trying to prevent that from happening by making the amendment more palatable and more difficult to oppose. Given the state of our transportation infrastructure and of public education in the Commonwealth, it will be difficult for people to oppose this amendment without looking bad.

      It’s a clever strategy. I hope it works, because we need this.

  7. Will, only questions I have are:

    Can the law be written where as if the budgets for the assigned decreases, the amount received decreases. My concern is we will have an influx of money which can only be used for these cases but the underlying funds keep g moving out and being replaced by this tax.

    Also, what is the estimated income the state would receive?

    Thanms.

    1. You are right that while the funds from the tax could only be used for the specified purposes, the application of those funds might free up other funds for spending for other things. That is a fair point.

      The amount raised is between $1 and $2 billion. (The total state budget is about $38 billion).

  8. The Ideal would be everyone pays the same amount of taxes end of story. 10% or whatever that may be. Unfortunately with tax write offs and the wealth generated by high income earners they have the wealth to put into ways to figure out how to pay less in taxes with loop holes etc.

    I don’t think this one vote will be big either way in the big picture. I think tax reform for everyone (abolishing the IRS) and Simplifying taxes so everyone pays their fair share will solve the problem.

    Until then every individual will feel like they are being attacked. Either the poor feel like they don’t have a chance or the rich feel like they’re being punished.

    I support which ever way you vote on the issue. I’d lean towards a no vote if it was up to me.

    The money is great but it might push the money right out of the state. Similar to the situation with offshore taxes by the multinationals. Trillions just offshore because our taxes are too high to bring them home.

    By having the appropriate fair taxes for everyone it would allow that money in. So similar to this vote I think that it would push the money out of MA eventually long term.

    1. The Ideal would be everyone pays the same amount of taxes end of story. 10% or whatever that may be.

      No, that’s not the ideal at all. Flat taxes are by definition regressive and impose an undue burden on low-income taxpayers.

  9. Of course it will only be used for road and bridge repair and of course public college tuition reduction-
    would your state government lie to you?

    1. Of course, any funds raised through the tax enacted by this amendment, which then go to transportation and education, will free up other funds in the general fund to go to other purposes. Money is fungible.

      So, yes, I agree with others who have pointed out that the amendment’s limitation on how the money can be used is not terribly meaningful. As noted in other comments, it’s a political strategy to get the amendment passed.

  10. This sounds very sensible to me and the dedication to the two areas might free up some funds for the other important projects, though I know needs have a way of expanding to meet funds.
    Mandated philanthropy in a way. Worth giving it a try.

  11. Tax sounds fine.
    However using it for roads when we already pay taxes for that seems strange.

    Now for universities etc. Lets gets the salaries and perks straightened up otherwise your throwing money to the wind.

    If your a professor earning more than 100k you should be teaching 5 days a week. Its been known that many have 2 classes a week and this needs to be reigned in.

    I also do not trust that those responsible for the distribution of this money and those incharge of spending it will do so wisely. Time and time again state agencies have proved they are not trust worthy to carry this out. Except for fish and game and few others.

    So tax yes.. but big NO D- on how its handled and being held accountable of spending, and cleanig up the waste in the areas this money is going too.

  12. Interesting proposal. Need more time to mull over and digest. On another topic, I prepared a long (four paragraphs discussion of the heroin/overdoes problem or epidemic that you highlighted in a prior email. I am not certain whether your office EVER received it or not. Would appreciate learning from one of your aides if your office ever received it. I can reconstruct it, if needed. thanks And glad that Boston, etc., dodged a weather bullet over the weekend. Jim and I are wintering in FL – one of the opportunities of senior status.

  13. Dear Will,

    Do we have any idea how much this new tax would bring to the state’s coffers? If it is substantial, and would do everything that we want it to do then why not. But are there estimates?

    Nayla

    1. From the Globe:

      “About 14,000 Massachusetts taxpayers reported taxable income of $1 million or more in 2013, the last year for which a breakdown is available. Many of them were clustered in Boston and wealthy suburbs such as Newton, Wellesley, and Weston”
      By David Scharfenberg GLOBE STAFF JULY 23, 2015

      Assuming these people [[only]] make $1,000,000, the tax impact is minimally $560,000,000 (half a billion dollars) per year. Clearly there are people who will make more than this amount and since the proposal is for $1m AGI, some of these people may not qualify, so this is just an estimate.

      1. Remember, the 4% tax would be only on the income over $1 million, not their entire income. Your math only works if each of those 14,000 taxpayers had at least $2 million in income — $1 million to hit the threshold and $1 million of income taxed at the extra 4%. In reality, many of these 14,000 likely make “only” a hundred thousand or two over the $1 million limit. Someone making $1.2m, would pay $8000 more in taxes ($200k x 4%), not $48,000 ($1.2m x 4%). If we assume that many of the 14,000 are clustered near $1 million, the amount raised will be nowhere near $500 million per year.

  14. $1,000,000 is not high enough, even it’ll be adjusted for inflation. It’s a huge penalty for entrepreneurs or any other professional who may reach this amount one year, but have losses on the years before and after. Could the legislation be if your income is higher than $1M for more than five years? Could it be a higher bracket $2-3M? Your concern about incentives for creative/commercially successful people to stay in the area is real.

  15. Linking these taxes to road construction and maintenance makes no sense. As gasoline prices plummet, this is the proper time for the state to boost gasoline taxes to properly cover the cost of roads and bridges. Gasoline and diesel excise taxes are a rough way for users to pay for the cost of transport systems.

    Adding a local option to the state motor fuels excise tax will also help with education costs, as even towns with not such high property values (property taxes are the main source of education funding) do sell motor fuels. MA should also look at existing exemptions to motor fuels taxes to see if they still make sense, or if some of them should be eliminated to ensure all road users are paying their fair share to build the road infrastructure.

    Finally, I’d like to see more strategic use of performance-based contracting on roads — so that if they fail prematurely, it is not only the public sector that has to shell out more money to fix them.

  16. I just feel like 9% on top of the 39.6% top earners pay in federal taxes is too much. If I only got to keep 51.4 cents for every dollar I made, I wouldn’t be happy. We already have tolls and gas taxes for roads, why not register bikes and have them pay a tax as well? You can only lean on the few for so long.

    1. 1) Objectively speaking, the U.S. economy — and the richest of the rich — have pretty much always done better the higher the highest marginal tax rate has been. There is no historical support for the claim that higher marginal tax rates slow the economy or discourage people from trying to make more money. This is one of the many completely bogus talking points which conservatives have used the Big Lie technique to convince people it’s true, when it simply isn’t.

      2) Regarding “If I only got to keep 51.4 cents for every dollar I made,” please learn how marginal tax rates work. You don’t only get to keep 51.4 cents for every dollar you make; you only get to keep 51.4 cents for every dollar you make over a million dollars a year. And, of course, because of all the tax dodges and deductions that are available to rich people, it actually isn’t even that bad. And the one fact that doesn’t change is, if you make more money, you get to keep more money.

      Higher taxes do not dissuade people from trying to earn more money. They simply don’t. Fact.

      1. Excellent points here and elsewhere Jonathan. The kind of specious arguments that Mr. Aylward makes hold too much sway with those who are not thoughtful, the result being a quality of life that is deteriorating for the majority of us.

  17. Go look at what has happened in other states where this type of a tax was approved and imposed. The high earners simply moved – themselves and their companies – to other states, with a huge net LOSS in state revenues. Is that what you really want? Hey folks, New Hampshire is next door with NO INCOME TAX. People don’t move there from Massachusetts for the weather. They move there to avoid Massachusetts taxes. Increasing taxes on millionaires might sound good to people who don’t make that much money but just think things all the way through and you will see that this is a net negative impact on our total tax revenues. Higher taxes is not the problem, folks – we need to encourage entrepreneurs and big businesses like GE to come to our state to make Massachusetts the envy of all other states in the nation. So please think about the repercussions of this silly and business killing proposal before just accepting it in knee jerk fashion. Total state tax revenues will decrease, we will lose jobs and companies will relocate to New Hampshire. Is that what you really want?

    1. Mr. Aylward, can you please provide a concrete citation to a single state in which the fear you are promulgating has actually happened. Not vague, “Go look” pronouncements. You’re the one making this argument, so it’s incumbent upon you to promote it.

      As just one counter-example, California’s taxes are much higher than Massachusetts’s, and I don’t see all the tech companies in Silicon Valley upping and moving somewhere else. On the contrary, the Valley still remains bar far the most popular place in the country for new start-ups to establish themselves.

      And, as noted elsewhere, non-residents working in MA still have to pay MA income taxes. Guess what? Lots of the people living in NH are actually paying income taxes on the salaries they make working in MA.

  18. Given the recent turmoil with the MBTA and charter schools, I feel that transportation and education may be at the forefront of many residents’ minds as a priority. Given the allowed spending categories for this increased revenue, it may be a very favorable time to push for this needed income tax change! Go for it!

  19. Not a bad idea in principle. However, such amendments to produce a progressive income tax in Massachusetts have frequently failed in the past. In this critical election season, moreover, this initiative may well prove a gift to Republicans, who love to tar Democrats with the charge that they are the party of high taxes. This is a liberal initiative, but with energy and resources limited, and with much of the public viscerally hostile to tax increases, it strikes me as a foolish campaign on which to focus in 2016.

  20. What is the estimated revenue from this?
    What % is that amount of current personal income tax revenues? How will the increased revenue be allocated between Ch. 70 & 90 spending? How was the 4% arrived at – was any analysis done on lesser & higher %’s?
    Thank you for your excellent Summary.

  21. I approve. Our family is making more money than we ever did by a decent increment, yet we’re nowhere close to being dinged by this tax. This is not onerous; anyone making over a million is well into fun money.

    I realize that the money so raised is subject to the fungibility bait-and-switch, but it’s far better than nothing, and we’re certainly prepared to watch for that stunt. We need more money for education, we need more money for transportation in all forms. Time spent stuck in traffic is a tax, too.

  22. This is great news. Really enjoy reading about the process in a very clear way.
    thanks Senator Brownsberger
    Dave

  23. Very well-thought-out analysis of the situation on its merits, as always – thanks! The proposal seems a good one, and I agree you should support this and see that citizens get to vote on it.

  24. I don’t think that this additional tax on the very rich folks will affect retaining or attracting new employees in this income bracket. But has any estimate been made about the additional taxes that would be generated by this effort and would it be sufficient to fund all the new initiatives?

  25. Before Massachusetts goes to the taxpayers, no matter how much they earn, for yet more money, the government has an obligation to see that the money they already confiscate in the form of taxes is well spent.

    Can anyone honestly say that all 1,551 T employees who earn over $100,000 are indispensible, or irreplaceable at that salary? That’s just transportation. Seventy-five employees in the Department of Education made over $100k in 2014, likely to be over 100 by now. (Not sure if that includes local school departments, but I don’t think so.) How does that help “local education”? In Watertown, the school budget request is up by $2.7 million over last year, almost 7%. Doesn’t sound destitute to me.

    Of course high-earners have more money than the rest of us. Doesn’t mean we’re entitled to it. I support the use of initiatives, but I’ll be voting against this one as many times as I can manage.

    1. The government is, essentially, a very large business.

      Every large business has waste.

      It is impossible to eliminate all of the waste.

      This tired trope — “No new taxes until we eliminate all the waste!” — is nothing more than a disingenuous attempt to prevent any increase in government revenue, since all the waste will never be eliminated.

      The fact of the matter is that all of the department you mentioned — MBTA, Ed, Watertown BPS — are under severe budget constraints and have been for years, and if it were easy or for that matter even feasible for them to “cut” a lot of “waste,” they would have already done it.

      The problem is not that there is waste in government. The problem is that too many of the people in this state want the government to do stuff but don’t actually want to pay for it.

      I, for one, am willing to pay for the services I think the government should provide. I make a heck of a lot less than $1 million per year, and I would be happy if the state raised my taxes to pay for those services.

      P.S. News flash: $100k is not a ridiculously high salary and hasn’t been for quite a few years. The problem isn’t actually that those people are overpaid; the problem is that so many other people are underpaid.

      1. So, my objections don’t matter because you say so. Then let me go further. In for a penny…

        Too many public services act as employment agencies and pension funds, not their nominal purpose. The sheer number of T employees pulling down $100k–some of them to “retire” in their 40s–would seem to cement that point.

        Government is a business? The only business model I know of that takes money out of the pockets of its customers, under threat of penalty, is organized crime. I guess you have a point.

        Taking money from people while being too lazy to eliminate waste and corruption is not just a fiscal or economic issue, it’s a moral one. Taking more, no matter how emotional the appeal, is indefensible. It’s third-world kleptocracy dressed up in a rumpled suit.

        1. Before everyone calls you a lunatic I’ll agree with you a little, but I think a bigger cancer is not direct payments to the kleptocrats (although direct payments in the form of inflated pensions to fat cats are obscene), but the use of subsidized State institutions to subsidize their actions (with leverage) should be reigned in or at least monetized by the State somehow.

  26. It should be $100,000. No one makes 1 million except lottery winners. $100,000 is a lot of money. All those rich people who own real estate can afford it when they sell their homes

    1. By David Scharfenberg GLOBE STAFF JULY 23, 2015

      About 14,000 Massachusetts taxpayers reported taxable income of $1 million or more in 2013, the last year for which a breakdown is available. Many of them were clustered in Boston and wealthy suburbs such as Newton, Wellesley, and Weston.

    2. It should be $100,000. No one makes 1 million except lottery winners.

      Hogwash.

      $100,000 is a lot of money.

      If by “a lot of money” you mean “more than enough for anybody to live on,” then no, it really isn’t, not if you’re trying to live in a city in Massachusetts and provide a decent upbringing for your kids.

      I live in the City of Boston. I have five kids. There are not enough good schools in Boston, which means that to ensure that my kids get a decent education, I have to send them to a private K-8 school. Three of my kids are in private school this year. If I were paying full tuition for them — which I’m not, since fortunately the school offers very generous financial aid — I’d be paying nearly $60k in tuition per year.

      My family spends over $13,000 per year on groceries. I believe we spent almost $7,000 last year for car expenses, for our 8-year-old minivan. Our mortgage is about another $10,000 per year. Etc.

      $100k per year is not a lot of money.

      People making $100k per year are not “rich.” As I noted elsewhere, the problem is not that too many people are making $100k per year, the problem is that not enough people are.

      1. You have the right to live anywhere you can afford. Move some place cheaper. If not, than i guess you should get on board and wake up and smell the coffee. You are rich. You need to pay more so others can have the same benefits as you

    3. 100k isnt alot of money when living near and aroud Boston. I would say its lime making 65k and living 40miles or more out of Boston.

  27. Yes! We all need to pay our fair share. The average tax rate for 99% of residents is 9.4% while the top 1% tax rate is 6.5%. The state is losing $2.2 billion in potential revenue. This amendment will reduce this gap. There are always concerns about the wealthiest people leaving if their tax rate goes up. We must also be concerned about people who are not millionaires leaving because their tax share being paid is too burdensome. We are always stronger when we work together. Everyone needs to pay their fair share.

  28. “It only applies to your income over $1,000,000 after all deductions and exemptions on your tax return” So these folks are making way more than 1 million and using “loopholes” err, sorry, exemptions, to bring down their income, so I wouldn’t worry about them. They are doing pretty well. They can swing it for the common good. And it will be easier on their Mercedes when the roads are smooth.

  29. My concern is how the government spends money and is it currently being efficiently and effectively spent. I’ll only vote for more revenue when convinced of that. Further, what is to keep the government from spending less of other normal funds on education and infrastructure and thus defeating the purpose of spending more on education and infrastructure through this new revenue. The only way to control government is to control revenue. Given more revenue, government will spent it and will find ways to avoid restrictions.

  30. I think what makes Massachusetts great is that it gives opportunities for residents to reach their highest goals as income earners while also supporting the “common good.” As a person with a significant physical disability, I rely on Medicaid and Medicare to pay for my personal care attendants and other medical needs. I also work in healthcare policy. Raising this tax will benefit everyone in the state without harming the highest income earners.

    1. how do you figure:

      “Raising this tax will benefit everyone in the state without harming the highest income earners.”

      They will be out $40,000 per year per million. This feels like harm to me. I suspect i could still support this, but lets not pretend that an extra 40 grand to the state is “small change”. It’s not.

      1. Everyone needs to remember that the proposal is for a new 4% tax on MARGINAL income OVER $1 million. That means that all income under $1 million (including the first $1 million of the 14,000 who make > $1 million) would be taxed at the same rate that people pay now. Only the income that EXCEEDS the $1 million limit would be subject to the extra 4%. So, if you made $1.2 million, you’d pay an extra $8000 ($200k x 4%) not 4% of your entire $1.2 million in income (which would be a huge $48,000 increase in taxes).

        This is an entirely reasonable proposal and thank you for supporting it.

        1. Thanks Paul, yes, I admit I missed that.

          I thought the proposal was to include an increase in the base tax below $1mm. Upon re-reading I now see that it is just a marginal tax, so someone who makes $1,000,001 pays an additional 4 cents (+ the $55,000 base tax)

          I still stand by comment that we should not discount additional tax payments for the rich as “harmless/painless”. Someone making $2m will pay an additional $40,000 on that second million.

          Again, not small change. For $40,00 you could easily move to NH.

          1. Sure, $40k is a serious chunk of change to anyone. But I wonder a bit who this person is who would be moving to NH. Makes $2 million per year, probably works downtown and lives not far from downtown — nice commute. This person blanches at the extra $40k in taxes — would rather relocate to NH and sit in traffic on 93 every day. I’m not seeing it, frankly.

            1. While you’re right, it might take some doing to move your income to another state, it’s certainly not impossible to do. And if you are skilled enough to be in that bracket, you’re probably not riding the T to work. As one poster further on up the page states, Florida starts to look attractive and with teleconferencing, email, etc. it’s not inconceivable that you’d simply move residence and business at the same time. 40 grand is still a good incentive.

            2. I’m sorry, but nobody making >$2million per year is going to waste their time and energy going through the effort of moving their residence and business just to save $40k a year in taxes.

              People who are making >$2million a year value their time.

              People who are making >$2million a year have probably been privileged to choose where they are living and are living where they want to be living.

              If they decide to leave over $40k in taxes on their >$2million in income, then they won’t actually be leaving because of the taxes, they’ll be leaving because they don’t want to be living in Massachusetts.

              And hey, you know some of the reasons why someone might not want to be living in Massachusetts? Because our public transportation sucks and is getting suckier by the day, and because our roads suck and are getting suckier by the day, and because our education system sucks and is getting suckier by the day.

              And so, I will ask yet again: if anyone can cite hard data to prove the assertion that this modest tax increase will actually result in less overall tax revenue, then please do so. Otherwise, absent actual facts, this is just another completely false Republican talking point.

        2. What if your parents pass away and you inherent a 1.5 million dollar home in Lexington and their $500,000 ira, two cars and $50,000 in stocks? Does this mean the state is a beneficiary of your parents? Can you contest the state because they were not in the will? I suppose Rose Kennedy did the right thing by putting her estate in Florida and paying nothing in the state where she never left for 50 years. Rich is rich. Bill Clinton defined rich as $100,000 income. I say go with that.

  31. Income from the sale of property (held long term), 401K assets etc should be specifically excluded. If not excluded, it would penalize those that saved all their lives for the rainy day (or retirement) with the expectation of enjoying the fruits of their labor/thrift (Eg selling my house might make me a “top earner’ in the year of sale thus incurring the additional tax penalty).

    Also I do not think it is right to pass a CONSTITUTIONAL amendment to set/change tax RATES or SPENDING. A bill should suffice.

    I will vote against the amending the constitution.

    1. 1. http://www.mass.gov/dor/individuals/filing-and-payment-information/guide-to-personal-income-tax/massachusetts-income/capital-ordinary-gains-and-losses.html#Gain

      2. If someone has managed to save such a huge retirement nest egg that they are able to withdraw >$1,000,000 in a single year in retirement income, after all deductions and exclusions, then there is no legitimate reason to exclude that income from the higher tax rate. It’s income like any other income. Not to mention the fact that IT WASN’T TAXED BEFORE, i.e., for all the years they were amassing that retirement fortune, they were not paying taxes on that income.

      I make a good income and foresee continuing to make a good income until I retire, and it’s inconceivable that I would be able to draw anything approaching a $1,000,000 annual income from my savings after retirement. People who can do that are very, very rich, and they can afford to pay the additional tax.

      3. It has already been explained here — several times — why a constitutional amendment is necessary, i.e., a bill is NOT sufficient, to enact a graduated income tax. Please take the time to read and understand what has already written before wasting everyone’s time posting ignorant comments.

      1. If you could not afford to educate your kids on your own dime without aid, why did you have 5 kids (see your post dated Jan 25 2016 @ 11.31am)? Do you think your personal irresponsibility should be supported by the state? I do believe that individuals and the state do need to invest in community but the individuals needing support in the community also need to be responsible for their actions/omissions. My wife and put ourselves through school, worked, saved and managed our family within our budget (while not relying on any aid. We took out loans and paid each one off to the cent). We are politically moderate progressives (we adopted kids). Along the way our thrift paid off. Now folks like you think the ‘one time reward’ of our thrift and sacrifice should be taxed the same as folks who get million $ compensation packages? Indeed – one could only expect such sanctimonious self-righteous attitudes from those that have most to gain by the tax penalty.

  32. Seems like a big jump in taxes for the high income folks, possibly enough to get their employers to jump to NH, with maybe a small local satellite office. Just wondering. I think the difference with California is that if you want to be close to the key cities, you still need to be located in the state. They don’t have a nearby-enough competitive state. We might lose all the tax revenue from the people and companies that move.

    Perhaps a slightly lower rate might be more palatable. Adding 4% to our current 5.2% rate “feels” almost like a doubling of the rate in comparison. Adding 3% “feels” more like a little over 50% increase.

    I don’t have a problem with taxing higher earners, because they have benefited from the economic environment that allowed them to have a job that pays so well.

  33. We are a wealthy state, we can afford things like a better transit system or universal Pre-K. Is this the best way of rising revenue, I am not sure, but I am very sick of being told “we must live with in are means” and seeing transit, education, and social service get cut while the states economy grows and gas prices fall while the idea of raising tax (either like this or rising the gas tax or creating a carbon tax) are dismissed with out consideration.

  34. MA needs to grow it’s economy to increase revenues. Any tax increase takes money out of the private economy which generates jobs and through that process increases tax revenues.

    Just as will the MBTA, schools and university expenses need to be examines. I am not talking about teacher’s salaries, but administrative overhead. Expenses for college sports teams should be reviewed as well.

    How many of these high earners are retired and could very easily change their residence?

    1. Any tax increase takes money out of the private economy which generates jobs and through that process increases tax revenues.

      Hogwash.

      Another Republican talking point with no basis in fact.

      The hilarious thing, of course, is that the other big talking point the Republicans use to oppose increased taxes is calling people who support them “tax-and-spend liberals.”

      Hey, guess what, you can’t have it both ways. If the money raised through increased taxes is SPENT, then it GOES BACK INTO THE ECONOMY, and therefore actually ENCOURAGES job growth.

      So, basically, these two different key Republican talking points about tax increases directly contradict each other.

      Also, rich people get rich by saving money. Revenue from taxes on rich people’s income is therefore far more likely to be put back into the economy by the government than it is to be put back into the economy if it stays in the rich people’s brokerage accounts.

  35. Will, I think that this is a good idea. We must find a way to make the kind of investments in our Commonwealth that will put us in good shape for the future. Given that upper incomes are rising and the majority are stagnant, it seems fair to make taxes progressive. If the amendment proves to have unforeseen consequences, then it could be repealed. But we must make an attempt to find the means for improving infrastructure. This proposal is less regressive than raising the gas tax.

    That said, I also believe that there must be a major campaign to improve the way tax money is spent. That is to root out waste, corruption and less than best practices. It is my sincere belief that most reasonable people do not mind paying for infrastructure or education, as long as they feel they are receiving good value in terms of service for the money that they pay.

    We all want to be proud of the Commonwealth as the place where we live, and there is much in which we can take pride. But the lack of investment in necessary public services like the MBTA is frankly beginning to get highly embarrassing. Something must be done: if not this, then what?

  36. As a high earner who would be affected by this, I would support a lower increase of 2% until we can see that the money is being spent responsibly.

    We have just seen a 40% increase in our property “appraisal” and equivalent increase in our property taxes for these same causes. I’m not all that willing to throw more into the bottomless pit without better accountability.

    It is very easy and tempting to keep dipping into the pockets of the wealthy but, remember that the wealthy spend and employ people in the community. For us, this proposed 4% would come directly from funds allocated for charitable giving and must be spent at least as responsibly.
    Further, at that % rate, Florida begins to look more and more tempting so, take heed or you will chase off another chunk of your tax base.

    Given my observation and experience with our local government here on Cape Cod, I do not feel all that confident that they are good stewards of our money and am against such a steep tax increase.

  37. I agree let the voters decide. Personally I think if you are fortunate enough to be making a million dollars a year after taxes you have a responsibility to contribute to the community that you have been so successful in.

  38. I think I support this proposal, but I do worry that the introduction of a graduated income tax at the state level is an easy slope to slide down.

  39. Can we use the revenues generated to retire transportation debt? We are not Taxachusetts, but more like Borrowachusetts.

  40. I’m generally in favor of the idea of progressive income tax rates, so I suppose I’m ok with this proposal. A bigger concern for me is the value we get from the taxes we do pay and I think all should pay at least some tax as I think that will promote a sense of collective responsibility.

    If we are to have a progressive tax rate system in MA I think there should be some intermediate steps at incomes less than 1M, perhaps another rate at $500k. Though this would probably be very unpopular with many more folks in the district.

  41. Will,

    Thank you for supporting the proposed amendment to Article 44 of the Mass. State Constitution. As a proponent of progressive taxation (increasing marginal tax rates on increasing income), I find Article 44 grossly anachronistic. In principle, I would support its repeal; likewise replacement of our flat-rate income tax with a graduated income tax. Pragmatically, because it is on the table, I support this legislation

    I will go you one further. You support this change due to specific education and infrastructure needs. I support it -regardless- of any specific need, and -because- it will mitigate the widening gap of income and wealth inequality that has characterized the last few decades. Those who earn more should pay a greater proportion of their income in taxes (which, conversely, might allow those with lesser incomes to pay less!).

    Sincerely,

    Aram Hollman

  42. I love this ballot initiative.
    My only question is the details of repair versus new construction. Is building a new school, or razing and building up again an existing school prohibited?
    What about rerouting an existing road to improve visibility or whatever?
    Can the wording still be changed?
    Thanks,
    Liz King

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