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Post Office Box 1147
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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
47 years as “The Voice of Massachusetts Taxpayers”
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their Institutional Memory — |
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CLT UPDATE
Thursday, June 10, 2021
Grad Tax #6 Heads To 2022 Ballot
Jump directly
to CLT's Commentary on the News
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Most Relevant News Excerpts
(Full news reports follow Commentary)
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Massachusetts lawmakers are poised Wednesday to advance one
of the most significant changes in state tax policy in
years.
Legislators will meet for a 1 p.m. Constitutional
Convention, and Democrats who hold super-majorities in both
chambers are set to vote to place on the 2022 ballot a
constitutional amendment imposing a 4 percent surtax on
household income above $1 million per year. If adopted by
voters, the change would take effect in 2023 and mark an
historic departure from the state's flat income tax rate
structure.
Citizens for Limited Taxation on Tuesday called the
proposal "another attempt to crack the flat tax which will
provide the first step toward creating a graduated income
tax for all." The group pointed back to the Legislature's
adoption and quick repeal of a tax on technology services in
2013, and warned that any effort to reverse an income surtax
would take years.
State House News Service
Wednesday, June 9, 2021
Income Tax Change Appears Headed Toward 2022 Ballot
With the impending vote on the so-called millionaire’s tax
constitutional amendment, our elected Legislature should
reflect on the purpose of our state’s constitution as a
guiding document. This examination of the constitution
should help us understand how any proposed amendment fits
within the lofty purpose of this foundation of governance,
what questions it raises if adopted and, more fundamentally,
if a proposal meets the standards of amending this revered
document or is more appropriately a matter of legislative
deliberation.
The Massachusetts Constitution is the world’s oldest
functioning one and the model for the US Constitution. It is
a governing guide for our state and society – a “social
compact” as the preamble states. Drafted by John Adams, this
remarkable document sets forth the purposes and powers of
government along with the rights of citizens. Our
constitution establishes prohibitions against unreasonable
searches and seizure, ex post facto laws, and the public
taking of private property without just compensation. It
gives residents the right to public education and enshrines
protections from government overreach, including freedom of
speech and worship, the right to petition the government,
and the right to a trial by jury....
However, on June 9 the Legislature will decide whether to
put before voters an amendment that would implement a
specific policy. The policy would set a defined income tax
rate on a specific segment of our citizenry. The amendment
does not protect any of our freedoms. It does not seek to
provide participation in government by groups of citizens
who are excluded. It does not address the death penalty,
voting rights, or the process of creating laws. Legislators
should ask themselves: is the text of the proposed amendment
a principle we need enshrined in our constitution?
The amendment raises fundamental questions about what our
constitution is and the durability of principles over time.
What standards must be met for a proposal to be embedded in
our constitution rather than considered by the Legislature?
If a tax rate meets the constitutional standard, where do we
draw the line? Why not include building heights? High school
graduation requirements? Criminal jail sentences? These are
all items that are appropriately debated and decided by the
three branches of government....
Why include the specific tax rate and threshold? Because
past attempts at adopting the principle of a graduated
income tax failed mightily when put before the voters. In
total, 16 proposed constitutional amendments failed over a
240-year period. Five of those proposals were to create a
graduated income tax, making it the most rejected issue in
state constitution history.
This amendment attempts to circumvent voters’ views on the
graduated tax principle by saying “Don’t worry, we don’t
mean you. We’re going to tax the other person.” The
constitution is a document of principles, though, not one
with specific tax rates and specific tax brackets. Rather
than adopting the principle of a progressive income tax
structure – which the state has already engineered within
the flat rate structure – this amendment enshrines the
principles of targeting specific taxpayers. A cynic could
argue that elected leaders are washing their hands of
difficult votes by allowing the citizenry to make the
decision on increasing taxes on other people....
Is it a good idea to create a new tax on income over $1
million? It may be, it may not be. But it is a specific
policy and not a principle to enshrine in the state’s
constitution. As legislators prepare for the June 9 vote, we
urge them to consider the work of Adams and his peers, the
framing, and the purpose of our constitution. We urge them
to acknowledge that tax rates are not meant to be set this
way.
CommonWealth Magazine
Tuesday, June 8, 2021
Millionaire tax doesn’t belong in Mass. constitution
Individual tax rates are not meant to be set this way
By James E. Rooney
A century-old provision of the Massachusetts Constitution
commands that if the commonwealth taxes income, it must do
so at a “uniform rate.” Five times in the modern era — in
1962, 1968, 1972, 1976, and 1994 — tax-and-spend liberals
have invited voters to discard that rule and make it legal
to soak the rich at higher tax rates. Five times voters have
said no. Activists tried a sixth time in 2018, but their
proposed initiative was so defective that the state’s
highest court ruled it unconstitutional.
Now comes Attempt No. 7....
There is considerable arrogance in the way advocates of the
surtax blithely disregard the voters’ repeated refusal to
overturn the constitutional ban. Their attitude seems to be
that no matter how many times the people uphold the
uniform-rate rule, there is no reason to take them
seriously. But just how serious are the claims of the
pro-tax crowd?
Those pushing for a millionaire’s tax sometimes justify
their demand by insisting that the wealthy don’t pay their
fair share in taxes. But the income tax is not regressive.
Taxpayers making $1 million and up, who earn 22 percent of
all income in Massachusetts, pay 24 percent of all income
taxes. Those million-dollar residents constitute just 0.5
percent of the state’s more than 3.8 million tax filers. Yet
they fork over nearly a quarter of all income taxes paid,
according to data published by the Department of Revenue.
If ever there was a time that state government didn’t
need more money, that time is now. Massachusetts is raking
in tax dollars at a record-busting pace. So far this fiscal
year, state government revenue is nearly $5.7 billion ahead
of where it was last year. That is not only more than Beacon
Hill was anticipating at the start of this year, it is more
than was forecast at the start of last year — before anyone
had heard of COVID-19. And that doesn’t include the
additional $5.3 billion showering down on Massachusetts from
the federal government. The State House News Service summed
up the situation in a headline: “State Awash in Extra Cash
Ahead of Surtax Debate.”
But the strongest argument against the millionaire’s surtax
is that it will deal a body blow to the Massachusetts
economy....
This week, more than 150 Massachusetts businesses
representing almost 16,000 workers sent lawmakers an open
letter imploring them not to hobble the state’s economy with
a stiff new tax, and expressing “alarm” at the proposed
constitutional amendment. They, like the Beacon Hill
Institute’s researchers, know that a surtax aimed at
millionaires is bound to injure countless people who will
never earn anywhere close to a million bucks. That is why
voters have repeatedly pulled the plug on attempts to soak
the rich. If the Legislature insists on going forward with
this latest scheme, voters will have to say no once more.
The Boston Globe
Wednesday, June 9, 2021
A ‘millionaires tax’ is still a terrible idea
Voters have repeatedly — and wisely — defended the state’s
ban on graduated tax rates.
By Jeff Jacoby
For Democrats, the rich are a gift that keeps on giving —
they double as scapegoat for society’s ills and blank check
for fattening state and federal coffers.
The notion of “paying one’s fair share” has become a
progressive rallying cry — with little heed to the fact that
high earners pay the lion’s share of taxes. According to
2018 government data, the top 1% of income earners — those
who earned more than $540,000 — earned 21% of all U.S.
income while paying 40% of all federal income taxes. The top
10% earned 48% of the income and paid 71% of federal income
taxes.
The left’s notion of “fair” bears watching.
An amendment proposing a millionaires tax, due for a vote in
the state Legislature this week, is the latest foray into
“fairness.” ...
It’s been the topic of much debate, and study — and when the
numbers are crunched, all that “fairness” looks pretty foul.
The Pioneer Institute released a study in April that found a
millionaires tax would spread the hurt to the middle class,
particularly those bound for retirement.
“Despite its purported goal of taxing only the uber-rich,
the graduated income tax would fail to protect people of
more modest means from overtaxation on one-time windfalls,”
wrote study authors Greg Sullivan and Andrew Mikula. “It has
the ability to push those with significant capital gains and
valuable asset sales into higher tax brackets, punishing
owners of retirement nest eggs and desirable real estate.”
...
Progressives are happy to paint high-earners as caricatures,
greedily hoarding the cash they’re not using to light their
cigars.
The reality is that money recirculates, through the large
amount in taxes paid, ventures funded, jobs created.
It looks likely that the millionaires tax will head to the
ballot in 2022 — enough time for people to do their
homework.
As David G. Tuerck, president of the Beacon Hill Institute
and report co-author, noted, “Supporters of the
millionaire’s tax ignore the reality that high income
taxpayers adjust their work effort and their decisions to
save and invest, particularly when they are more willing to
move.”
What is portrayed as a boon for the state looks more like a
bust.
The Boston Herald
Wednesday, June 9, 2021
A Boston Herald editorial
Numbers don’t add up for millionaires tax
This is a big day for the hackerama and the
welfare-industrial complex – the Legislature will be
rubber-stamping the graduated income tax onto the 2022
ballot.
Five times Massachusetts voters have said no to having their
pockets picked – in 1962, 1968, 1972, 1976 and 1994 – and
the SJC nixed the same heist a few years back.
But now the gimme guys ‘n’ gals figure the seventh time will
be the charm. This time, the payroll patriots are only going
after “millionaires.” Wink wink nudge nudge.
As usual, this $2 billion theft from taxpayers will be
portrayed as an “investment.” It’s only going to
transportation and education. Oh sure.
Get ready for the media cheerleaders waving their pom-poms
in unison today, telling you this is the greatest thing to
come along since the lockdown. But before the slobbering
begins, try to remember how the hacks would really be
squandering your dough....
This is your hackerama. This is your welfare-industrial
complex. State tax revenues for the fiscal year are already
up $4 billion, billions more are on their way from D.C. …
but now the non-working classes are banging their tin cups
on the steps of the State House, demanding more More MORE!
Go ahead, vote to increase your own taxes. It won’t all go
to racists, illegals, alleged drunks, connected hacks and
layabouts. Some of it will go to regular waste, fraud and
abuse. That’s the Massachusetts way.
The Boston Herald
Wednesday, June 9, 2021
Hold on to your wallets, it’s Taxachusetts time
By Howie Carr
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% surtax on household income
exceeding $1 million. Massachusetts has long had a flat
income tax rate of about 5%, 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....
“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 [sic - correct citation is
Citizens for Limited Taxation] 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?”
The Springfield Republican
Wednesday, June 9, 2021
Massachusetts lawmakers send ‘Fair Share Amendment’ tax hike
on millionaires to 2022 ballot
With a vote of the House and Senate Wednesday afternoon, the
Massachusetts Legislature effectively kicked off a
year-and-a-half-long ballot campaign around the proposed
constitutional amendment to increase taxes on the wealthy
and move away from the state's flat income tax rate
structure.
The House and Senate, meeting jointly in a Constitutional
Convention to consider proposed amendments to the state's
Constitution while the State House remains closed to the
public, voted 159-41 Wednesday to let voters decide on the
2022 statewide ballot whether to impose a new 4 percent
surtax on annual household income over $1 million. The
measure (S 5) needed 101 votes to advance.
Only one Republican, Sen. Patrick O'Connor of Weymouth,
voted to advance the amendment while nine Democrats -- Reps.
Brian Ashe, Ann-Margaret Ferrante, Michael Finn, William
Galvin, Colleen Garry, Chris Markey, Angelo Puppolo, Paul
Schmid and Jonathan Zlotnik -- voted in opposition.
The vote marks the successful conclusion of the legislative
process for surtax supporters led by Raise Up Massachusetts,
the coalition of labor, community and faith-based groups
that has secured minimum wage increases, a new paid family
and medical leave program and guaranteed earned sick time in
recent years. But it also marks the start of a campaign to
convince regular voters around Massachusetts to
substantially reshape the state's tax structure....
While labor unions, progressive-minded organizations and
Democratic lawmakers celebrated, condemnation of the
Legislature's vote came swiftly Wednesday afternoon.
Paul Craney, a spokesman for the Massachusetts Fiscal
Alliance, said Beacon Hill Democrats "will use today as a
rallying cry to raise taxes on the rich and if they are
successful, they will make sure we are all considered rich
when the taxes are due."
The Massachusetts chapter of the National Federation of
Independent Business said it was disappointed that the
Legislature advanced the graduated income tax proposal and
warned that it will harm small businesses already hurting
from the pandemic.
"The proposal's supporters conveniently omitted that many
small businesses who file as pass-through entities for tax
purposes will be impacted by the higher tax rate," NFIB
State Director Christopher Carlozzi said. "Those business
owners who spent a lifetime building their business,
providing jobs, paying taxes, participating in their
communities, will be penalized with a higher taxes when they
sell their business to retire." ...
The income surtax amendment could become something of a
center of gravity for the 2022 election cycle in
Massachusetts, especially in the race for governor....
Gov. Charlie Baker has not said whether he intends to run
for a third term in 2022 and he's also not outlined a clear
position on the income surtax. Baker's office did not offer
a response to Wednesday's vote, but the Republican governor
generally does not favor tax increases.
All of the state's Constitutional offices and all 200 seats
in the Legislature will also be on the November 2022 ballot,
and Mass. Fiscal suggested that's when voters could let
Democrats who advanced the surtax amendment know how they
feel about it.
"The voters should not forget or forgive this level of greed
and they will have another chance to hold them accountable
in 2022," Craney said.
Surtax supporters were confident about going to the ballot
in 2018, too, before the SJC derailed that campaign. Raise
Up and the legislative sponsors said after Wednesday's vote
that they are confident the question will actually go to
voters next year but acknowledged that the campaign will be
long and bruising.
"We feel that we're on really solid ground, but I'm sure the
opponents of this are going to look under any rock, every
rock, to try to find some kind of way from preventing
themselves from having to pay their fair share," O'Day told
reporters in the hallway outside the House Chamber. "They
are the ones, obviously, that will have the ability to throw
a ton of cash at this issue and that's probably how they're
going to try to beat it. They'd rather spend $100 million on
defeating this than spend an extra $40,000 or $50,000 in
taxes. It doesn't make a great deal of sense to me if you
want to be a good neighbor."
State House News Service
Wednesday, June 9, 2021
Lawmakers Advance Income Surtax to 2022 Ballot
O'Day Expects Opponents to Spend "Tons of Cash"
Massachusetts lawmakers overwhelmingly voted Wednesday to
advance a sweeping change to the state tax code to the 2022
ballot, kickstarting what’s expected to be a bruising
political debate over whether the wealthiest residents
should pay more in taxes.
By a 159-41 margin, the House and Senate gave its approval
to a proposed constitutional amendment that would impose a 4
percent surtax on annual personal income above $1 million.
The measure could generate billions in revenue that
supporters say could improve the state’s schools, roads, and
subways.
The Democratic-dominated chambers easily cleared the
101-vote threshold needed to advance the so-called
millionaires tax, and ensured that it cleared the last
procedural hurdle to go before voters in November 2022, when
the governor, each statewide office, and every seat in the
Legislature will also be on the ballot.
The Boston Globe
Wednesday, June 9, 2021
Massachusetts Legislature overwhelmingly advances
millionaires tax proposal to 2022 ballot
This latest campaign to make the state’s flat tax into a
graduated income tax would impose a 4 percent tax surcharge
on incomes of $1 million and more. Six past efforts to
impose a similar graduated income tax scheme have failed at
the ballot box and, more recently, the state’s highest court
rejected it as “unconstitutional.”
However, past failures and even the will of the voters have
not deterred the proponents. Unlike every single past
attempt, this latest attempt is not derived by citizens, but
by lawmakers, who want to seek to change the protections in
the state constitution and be able to tax at will. While
they claim the measure is about raising taxes on high-income
earners, what they are attempting to change is the
constitutional protections that are enshrined in the state
constitution to protect taxpayers from unequal taxation.
Proponents of the millionaire tax make two central claims.
First, they argue that the tax will impinge only on the
Commonwealth’s highest earners while leaving everyone else
unaffected. Second, they promise that the revenue generated
from the next tax will raise some $2 billion annually, all
of which will go toward spending on education and
infrastructure. Both claims are false....
In a study
released today sponsored by the Fiscal Alliance
Foundation, we used the Beacon Hill Institute’s State Tax
Analysis Modeling Program (STAMP) to determine that the tax
would drive 4,388 working households (households with at
least one employed person) out of the state in its first
year of implementation. Private sector jobs would
simultaneously fall by 9,329. Because income taxes would
rise, disposable income would fall by $963 million, and
state economic output would fall by $431 million.
Because of this shrinkage in the economy, state tax revenues
would rise by only $1.231 billion, not by the promised $2
billion. This should be a clear warning to taxpayers, who
should ask themselves where will the rest of the taxpayer
money come from in order to satisfy the spending by State
House politicians. That would be you, of course.
CommonWealth Magazine
Tuesday, June 8, 2021
Claims for millionaire tax don’t add up
Would trigger job losses, cutting into revenue gains
By David G. Tuerck and Lauri Belsito
A day before lawmakers plan to vote on whether to put a
constitutional amendment on the 2022 ballot to raise taxes
on the wealthy, opponents are challenging the assertions by
Democratic leaders that it could raise $2 billion for
education and transportation with new research suggesting
the tax would cost jobs and produce significantly less new
revenue.
A study done by the Beacon Hill Institute for Public Policy
Research estimates that if wealthy earners in Massachusetts
were forced to pay a 4 percent surtax on all income over $1
million it would generate $1.23 billion in new taxes in
2023.
That estimate, which climbs to $1.5 billion by 2027, is
substantially less than the roughly $1.9 billion projected
by the Department of Revenue six years ago.
BHI President David Tuerck and Director of Research William
Burke also said the so-called millionaires tax would cost
the state 9,329 private sector jobs in the first year and
reduce the number of working households by 4,388, mostly due
to high earners leaving Massachusetts for lower cost states.
"The reason it will raise less revenue than predicted is
because the proponents don't bother to figure out what it
will do to the state economy," Tuerck said on a conference
call organized by the Massachusetts Fiscal Alliance
Foundation....
Raise Up, a coalition of labor, faith and community
organizations, first tried to put the millionaires tax
proposal on the ballot in 2018, but it was struck down by
the Supreme Judicial Court as ineligible.
This time the amendment has been proposed by Rep. James
O'Day of West Boylston and Sen. Jason Lewis of Winchester,
rather than as a citizens petition, resolving the issues
raised by the court and putting the amendment one vote away
from the 2022 ballot.
Senate President Karen Spilka and House Speaker Ron Mariano
have teed up the proposal for Wednesday afternoon when it
will need the support of at least 101 of the 200 House and
Senate lawmakers on Beacon Hill to advance to next year's
ballot.
When the proposal last went before the Legislature for a
vote in 2019, it passed with 147 legislators in support. A
second vote is required during this legislative session for
the amendment to progress to the ballot.
Paul Craney, the spokesman for the Mass Fiscal Alliance
Foundation, said it's important that legislators have
information on the tax's impact before they vote Wednesday,
and if it does pass he said he's "optimistic" voters will
reject it.
"They usually make the right decision on this," Craney said,
pointing to the defeat in Illinois last year of a ballot
question to implement a graduated income tax....
Tuerck also called it a "dangerous claim" that proponents
make when they say the money will be allocated for education
and transportation, calling the money "fungible" and noting
there's nothing to stop the Legislature from using the
income tax revenue to replace, rather that add to, money
already being spent in those areas.
Tuerck also questioned the underlying need for more revenue,
suggesting Massachusetts was already among the most generous
in the country when it comes to per-pupil spending on public
schools.
"Why do we really need to increase spending on education?"
Tuerck asked.
"We're raising substantially more revenue that we have
historically in Massachusetts and nobody would look at the
current budget and say we have a tax revenue crisis in the
state. We do not. We don't have a transportation and
education crisis. What we have a is lot of money flowing
into the Treasury because of the recovery we're having," he
said.
State House News Service
Tuesday, June 8, 2021
On Eve of Tax Vote, Study Predicts Job Losses
Lawmakers Appear Ready to Move Away From Flat Income Tax
Rate
The question of adding tax policy (S 5) into the state's
Constitution for the first time in Massachusetts history
will be placed before voters in 2022 in the form of a four
percent surtax on incomes above $1 million after lawmakers
advanced the so-called Fair Share Amendment Wednesday
afternoon. Legislators voted 159-41 in favor of the proposal
during a Joint Session, picking up a number of votes since
the last time lawmakers took up the amendment.
Advocates say the state stands to gain over $2 billion in
revenue that would be earmarked for education and
transportation investments while opponents say wealthy
individuals and businesses could end up leaving the state
because of higher tax rates.
"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 more equitable for everyone," said Sen. Jason Lewis
(D-Winchester).
House Minority Leader Brad Jones said he fundamentally
disagrees with adding tax policy into the Constitution,
saying if lawmakers make a mistake with the Fair Share
Amendment, it will take a four-year process to fix. He
pointed to a 2013 tax on technology services that lawmakers
and Gov. Deval Patrick repealed months after they passed the
measure.
"There's precedent in the last decade. We did the tech tax,
2013, without understanding the ramifications, and within a
matter of months, we repealed it," the North Reading
Republican said. "If we mess up on this, guess what,
four-year process, four-year process."
The Constitutional Convention also represented one of the
first times a large group of people -- by one count, around
80 people -- have gathered in the House Chamber since a
rules debate over the summer of 2020 prompted House
Democrats and Republicans to flood the chamber. The
Constitutional Convention is scheduled to return to session
on Monday, Oct. 25 at 12 p.m.
State House News Service
Wednesday, June 9, 2021
Constitutional Convention Summary
Votes to Send Income Surtax to 2022 Ballot
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Chip Ford's CLT
Commentary
There was no stopping
the slobbering and drooling on Beacon Hill yesterday, the rapacious lust
on full display for always more confiscation from productive taxpayers.
Like a downhill runaway freight train the Democrat super-majority (and
one lone turncoat Republican,
Sen. Patrick O'Connor of Weymouth) there
was no hope of stopping the next graduated income tax (aka, the
"Millionaire's Tax" or "Fair Share Amendment") from being overwhelmingly
passed by a vote of 121-39 on the House side and 30-2 on the Senate side
and was sent to the 2022 ballot. The combined debate and vote took
less than an hour (1:40 - 2:37 pm).
Remarkably, nine Democrats — Reps. Brian
Ashe, Ann-Margaret Ferrante, Michael Finn, William Galvin, Colleen
Garry, Chris Markey, Angelo Puppolo, Paul Schmid and Jonathan Zlotnik
— voted against it.
The full constitutional
convention debate on the next step toward a graduated income tax can be
found at the bottom of this update.
SEE AND/OR DOWNLOAD THE ROLL CALL VOTE HERE
There's a lot of news
from Tuesday leading up to the vote yesterday following its passage.
I'll highlight some of it with sources but provide all the full news
reports below for those who want to learn more. I'm keeping and
including all the news reports as an historical reference, a record.
I'm sure they'll be useful as the opposition campaign to defeat this
sixth attempt on the ballot ramps up, and as the taxpayers'
"institutional memory" that is the purpose of the CLT website (where
this will be posted next as usual).
I was a interviewed
yesterday, along with David Tuerck of Beacon Hill Institute, on our
reactions to passage of the sixth graduated income tax amendment and why
CLT opposes it. You can listen to the interviews here:
New
England Public Media
And Another Thing - Wednesday June 9
By Dara Kennedy & Maya Shwayder
I'll leave you with
excerpts from the two best and most principled arguments against this
or any graduated income tax I've come across, echoing CLT's
position. The first was written by Boston Globe columnist Jeff
Jacoby and published yesterday
("A ‘millionaires tax’ is still a terrible idea —
Voters have repeatedly — and wisely — defended the state’s ban on
graduated tax rates"):
A century-old provision of the Massachusetts
Constitution commands that if the commonwealth taxes income, it must
do so at a “uniform rate.” Five times in the modern era — in 1962,
1968, 1972, 1976, and 1994 — tax-and-spend liberals have invited
voters to discard that rule and make it legal to soak the rich at
higher tax rates. Five times voters have said no. Activists tried a
sixth time in 2018, but their proposed initiative was so defective
that the state’s highest court ruled it unconstitutional.
Now comes Attempt No. 7....
There is considerable arrogance in the way
advocates of the surtax blithely disregard the voters’ repeated
refusal to overturn the constitutional ban. Their attitude seems to
be that no matter how many times the people uphold the uniform-rate
rule, there is no reason to take them seriously. But just how
serious are the claims of the pro-tax crowd?
Those pushing for a millionaire’s tax sometimes
justify their demand by insisting that the wealthy don’t pay their
fair share in taxes. But the income tax is not regressive. Taxpayers
making $1 million and up, who earn 22 percent of all income in
Massachusetts, pay 24 percent of all income taxes. Those
million-dollar residents constitute just 0.5 percent of the state’s
more than 3.8 million tax filers. Yet they fork over nearly a
quarter of all income taxes paid, according to data published by the
Department of Revenue.
If ever there was a time that state government
didn’t need more money, that time is now. Massachusetts is
raking in tax dollars at a record-busting pace. So far this fiscal
year, state government revenue is nearly $5.7 billion ahead of where
it was last year. That is not only more than Beacon Hill was
anticipating at the start of this year, it is more than was forecast
at the start of last year — before anyone had heard of COVID-19. And
that doesn’t include the additional $5.3 billion showering down on
Massachusetts from the federal government. The State House News
Service summed up the situation in a headline: “State Awash in Extra
Cash Ahead of Surtax Debate.”
But the strongest argument against the
millionaire’s surtax is that it will deal a body blow to the
Massachusetts economy....
This week, more than 150 Massachusetts
businesses representing almost 16,000 workers sent lawmakers an open
letter imploring them not to hobble the state’s economy with a stiff
new tax, and expressing “alarm” at the proposed constitutional
amendment. They, like the Beacon Hill Institute’s researchers, know
that a surtax aimed at millionaires is bound to injure countless
people who will never earn anywhere close to a million bucks. That
is why voters have repeatedly pulled the plug on attempts to soak
the rich. If the Legislature insists on going forward with this
latest scheme, voters will have to say no once more.
The second was published in CommonWealth Magazine on
Tuesday, written by James E. Rooney, president and CEO of
the Greater Boston Chamber of Commerce ("Millionaire
tax doesn’t belong in Mass. constitution
— Individual tax rates are not
meant to be set this way"):
With the impending vote on the
so-called millionaire’s tax constitutional amendment,
our elected Legislature should reflect on the purpose of
our state’s constitution as a guiding document. This
examination of the constitution should help us
understand how any proposed amendment fits within the
lofty purpose of this foundation of governance, what
questions it raises if adopted and, more fundamentally,
if a proposal meets the standards of amending this
revered document or is more appropriately a matter of
legislative deliberation.
The Massachusetts Constitution is
the world’s oldest functioning one and the model for the
US Constitution. It is a governing guide for our state
and society – a “social compact” as the preamble states.
Drafted by John Adams, this remarkable document sets
forth the purposes and powers of government along with
the rights of citizens. Our constitution establishes
prohibitions against unreasonable searches and seizure,
ex post facto laws, and the public taking of private
property without just compensation. It gives residents
the right to public education and enshrines protections
from government overreach, including freedom of speech
and worship, the right to petition the government, and
the right to a trial by jury....
However, on June 9 the Legislature
will decide whether to put before voters an amendment
that would implement a specific policy. The policy would
set a defined income tax rate on a specific segment of
our citizenry. The amendment does not protect any of our
freedoms. It does not seek to provide participation in
government by groups of citizens who are excluded. It
does not address the death penalty, voting rights, or
the process of creating laws. Legislators should ask
themselves: is the text of the proposed amendment a
principle we need enshrined in our constitution?
The amendment raises fundamental
questions about what our constitution is and the
durability of principles over time.
What standards must be met for a
proposal to be embedded in our constitution rather than
considered by the Legislature? If a tax rate meets the
constitutional standard, where do we draw the line? Why
not include building heights? High school graduation
requirements? Criminal jail sentences? These are all
items that are appropriately debated and decided by the
three branches of government....
Why include the specific tax rate
and threshold? Because past attempts at adopting the
principle of a graduated income tax failed mightily when
put before the voters. In total, 16 proposed
constitutional amendments failed over a 240-year period.
Five of those proposals were to create a graduated
income tax, making it the most rejected issue in state
constitution history.
This amendment attempts to
circumvent voters’ views on the graduated tax principle
by saying “Don’t worry, we don’t mean you. We’re going
to tax the other person.” The constitution is a document
of principles, though, not one with specific tax rates
and specific tax brackets. Rather than adopting the
principle of a progressive income tax structure – which
the state has already engineered within the flat rate
structure – this amendment enshrines the principles of
targeting specific taxpayers. A cynic could argue that
elected leaders are washing their hands of difficult
votes by allowing the citizenry to make the decision on
increasing taxes on other people....
Is it a good idea to create a new
tax on income over $1 million? It may be, it may not be.
But it is a specific policy and not a principle to
enshrine in the state’s constitution. As legislators
prepare for the June 9 vote, we urge them to consider
the work of Adams and his peers, the framing, and the
purpose of our constitution. We urge them to acknowledge
that tax rates are not meant to be set this way.
One critic of Jeff
Jacoby's Boston Globe column commented on The Globe's website:
Really Jeff, it's a simple concept to
understand. All Americans want is for all to pay their fair
share in taxes! The 1% do not now, and haven't for god knows
how long!
Good for them, that they are successful!
They worked hard for it (or inherited it, or made it on
investments), But you what? I worked hard for my money too,
most have!
Just pay your fair share, that's all we are
asking for! And please, we all know they don't pay their fair
share under current laws!
I responded:
What can be more fair than every taxpayer
paying a tax on their taxable income at the same rate? That
used to celebrated as equality.
A worker earning $50,000 a year pays $2,500 in
income tax. Someone earning $100,000 a year pays $5,000 in
income tax. Earn $250,000 a year and you'll pay $12,500 for your
"fair share" of the income tax. Make $500,000 a year and you'll pay
$25,000, your "fair share." But if you reach an income of $1
million a year your income tax will pay the equivalent of the entire
salary of that first worker in this example earning $50,000 before
taxes.
To tax that millionaire an additional 4 percent
cannot in any way honestly be argued as "fair." It is derived
from Marxist ideology, "From each according to his ability to each
according to his needs."
A recent Boston Herald editorial described this
money grab best: "It seems simple enough to those who back
such a move: We need money, you have money, it’s only fair you give
it to us."
From the State House News Service report yesterday
("Lawmakers Advance Income Surtax to 2022 Ballot —
O'Day Expects Opponents to Spend 'Tons of Cash'"):
The income surtax amendment could
become something of a center of gravity for the 2022
election cycle in Massachusetts, especially in the race
for governor....
All of the state's Constitutional
offices and all 200 seats in the Legislature will also
be on the November 2022 ballot, and Mass. Fiscal
suggested that's when voters could let Democrats who
advanced the surtax amendment know how they feel about
it.
"The voters should not forget or
forgive this level of greed and they will have another
chance to hold them accountable in 2022," Craney said.
Surtax supporters were confident
about going to the ballot in 2018, too, before the SJC
derailed that campaign. Raise Up and the legislative
sponsors said after Wednesday's vote that they are
confident the question will actually go to voters next
year but acknowledged that the campaign will be long and
bruising.
"We feel that we're on really solid
ground, but I'm sure the opponents of this are going to
look under any rock, every rock, to try to find some
kind of way from preventing themselves from having to
pay their fair share," O'Day told reporters in the
hallway outside the House Chamber. "They are the ones,
obviously, that will have the ability to throw a ton of
cash at this issue and that's probably how they're going
to try to beat it. They'd rather spend $100 million on
defeating this than spend an extra $40,000 or $50,000 in
taxes. It doesn't make a great deal of sense to me if
you want to be a good neighbor."
A classic case of the
pot calling the kettle black (is using that phrase now
politically-incorrect and cancelled?) — boohoo.
The Takers are expecting The Providers to "throw a ton of
cash at this issue" in self-preservation! The Takers like
"tax fairness" but not so much with fairness of a ballot campaign.
The Takers' jihad against taxpayers this time as usual is funded
by all the
expected special interests: The usual deep-pockets of
teachers, public employee, and labor unions that make most grassroots
tax-cut petition drives and ballot questions a lopsidedly outspent
effort. I hope and pray that Rep. O'Day is correct, that for once
The Takers will need to compete on a financially level playing
field.
So it's game-on taxpayers. Let Round Six of the Tax Olympics
begin! We'll need to hand them their heads again on the 2022
ballot — for the sixth time.
|
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|
Chip Ford
Executive Director |
|
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Full News Reports Follow
(excerpted above) |
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State House News Service
Wednesday, June 9, 2021
Income Tax Change Appears Headed Toward 2022 Ballot
By Michael P. Norton
Massachusetts lawmakers are poised Wednesday to advance one
of the most significant changes in state tax policy in
years.
Legislators will meet for a 1 p.m. Constitutional
Convention, and Democrats who hold super-majorities in both
chambers are set to vote to place on the 2022 ballot a
constitutional amendment imposing a 4 percent surtax on
household income above $1 million per year. If adopted by
voters, the change would take effect in 2023 and mark an
historic departure from the state's flat income tax rate
structure.
Citizens for Limited Taxation on Tuesday called the
proposal "another attempt to crack the flat tax which will
provide the first step toward creating a graduated income
tax for all." The group pointed back to the Legislature's
adoption and quick repeal of a tax on technology services in
2013, and warned that any effort to reverse an income surtax
would take years.
Supporters of the surtax say it's an appropriate way to
ensure the state's wealthiest households pay their "fair
share" of the state's collective tax burden, and will
produce significant revenues to be invested in education and
transportation.
The amendment was forwarded from the previous Legislature
and is not subject to further amendment on Wednesday, which
means the vote to send it to the ballot, where a bruising
campaign is likely, is set to follow arguments for and
against it.
The measure also contains a cost of living adjustment clause
"to ensure that this additional tax continues to apply only
to the commonwealth's highest income taxpayers."
The question before the convention will be on agreeing to
the amendment (S 5) and 101 votes are required to advance
it.
CommonWealth Magazine
Tuesday, June 8, 2021
Millionaire tax doesn’t belong in Mass. constitution
Individual tax rates are not meant to be set this way
By James E. Rooney
With the impending vote on the so-called millionaire’s tax
constitutional amendment, our elected Legislature should
reflect on the purpose of our state’s constitution as a
guiding document. This examination of the constitution
should help us understand how any proposed amendment fits
within the lofty purpose of this foundation of governance,
what questions it raises if adopted and, more fundamentally,
if a proposal meets the standards of amending this revered
document or is more appropriately a matter of legislative
deliberation.
The Massachusetts Constitution is the world’s oldest
functioning one and the model for the US Constitution. It is
a governing guide for our state and society – a “social
compact” as the preamble states. Drafted by John Adams, this
remarkable document sets forth the purposes and powers of
government along with the rights of citizens. Our
constitution establishes prohibitions against unreasonable
searches and seizure, ex post facto laws, and the public
taking of private property without just compensation. It
gives residents the right to public education and enshrines
protections from government overreach, including freedom of
speech and worship, the right to petition the government,
and the right to a trial by jury.
These principles endure, but, of course, the state
constitution drafted in 1780 needed updating over the years.
To date, 120 amendments were adopted by Massachusetts
voters, and most deal with fundamental principles like
voting rights, creating local governments, the separation of
powers, and indeed the process of amending the constitution.
The purpose of the state’s constitution is laid out in its
preamble: “It is the duty of the people, therefore, in
framing a constitution of government, to provide for an
equitable mode of making laws, as well as for an impartial
interpretation, and a faithful execution of them…”. The
constitution’s purpose is to guide lawmaking and governing,
to provide principles for government to follow, and to
enshrine protections for residents. The purpose is not to
implement specific policies. That work is the purpose of the
biennially elected Legislature.
However, on June 9 the Legislature will decide whether to
put before voters an amendment that would implement a
specific policy. The policy would set a defined income tax
rate on a specific segment of our citizenry. The amendment
does not protect any of our freedoms. It does not seek to
provide participation in government by groups of citizens
who are excluded. It does not address the death penalty,
voting rights, or the process of creating laws. Legislators
should ask themselves: is the text of the proposed amendment
a principle we need enshrined in our constitution?
The amendment raises fundamental questions about what our
constitution is and the durability of principles over time.
What standards must be met for a proposal to be embedded in
our constitution rather than considered by the Legislature?
If a tax rate meets the constitutional standard, where do we
draw the line? Why not include building heights? High school
graduation requirements? Criminal jail sentences? These are
all items that are appropriately debated and decided by the
three branches of government.
What are the implications of considering a tax rate issue
within the deliberately tedious process of amending our
constitution? One major drawback is that the language
considered in 2019 cannot be changed when the Legislature
considers its vote on June 9. Is that language perfect? Has
the context changed at all since 2019? Yes, there are
dramatic contextual changes.
Why include the specific tax rate and threshold? Because
past attempts at adopting the principle of a graduated
income tax failed mightily when put before the voters. In
total, 16 proposed constitutional amendments failed over a
240-year period. Five of those proposals were to create a
graduated income tax, making it the most rejected issue in
state constitution history.
This amendment attempts to circumvent voters’ views on the
graduated tax principle by saying “Don’t worry, we don’t
mean you. We’re going to tax the other person.” The
constitution is a document of principles, though, not one
with specific tax rates and specific tax brackets. Rather
than adopting the principle of a progressive income tax
structure – which the state has already engineered within
the flat rate structure – this amendment enshrines the
principles of targeting specific taxpayers. A cynic could
argue that elected leaders are washing their hands of
difficult votes by allowing the citizenry to make the
decision on increasing taxes on other people.
These questions lead to more questions and issues. Because
the policy would be in the constitution, it leaves little
room for quickly adapting to the contours and challenges of
reality.
What if the new tax affects people who were not meant to be
taxed? The label of a millionaire’s tax suggests that it
targets earned income with precision. But it does not. Small
S-corps and family-owned businesses throughout the
Commonwealth will see tax increases under this proposal.
What if it drives employers or talent out of the state? Or
what if government doesn’t spend it on education and
transportation? Or what if the 4 percent tax is too much?
What if it is too little? In those cases, we will be stymied
by a constitutional amendment process that delays action for
at least four years.
Is it a good idea to create a new tax on income over $1
million? It may be, it may not be. But it is a specific
policy and not a principle to enshrine in the state’s
constitution. As legislators prepare for the June 9 vote, we
urge them to consider the work of Adams and his peers, the
framing, and the purpose of our constitution. We urge them
to acknowledge that tax rates are not meant to be set this
way.
— James Rooney is the
president and CEO of the Greater Boston Chamber of Commerce.
The Boston Globe
Wednesday, June 9, 2021
A ‘millionaires tax’ is still a terrible idea
Voters have repeatedly — and wisely — defended the state’s
ban on graduated tax rates.
By Jeff Jacoby
A century-old provision of the Massachusetts Constitution
commands that if the commonwealth taxes income, it must do
so at a “uniform rate.” Five times in the modern era — in
1962, 1968, 1972, 1976, and 1994 — tax-and-spend liberals
have invited voters to discard that rule and make it legal
to soak the rich at higher tax rates. Five times voters have
said no. Activists tried a sixth time in 2018, but their
proposed initiative was so defective that the state’s
highest court ruled it unconstitutional.
Now comes Attempt No. 7.
Meeting in joint session Wednesday, the Massachusetts House
and Senate are poised to approve an amendment that would
impose a 4-percentage-point surtax on all income above $1
million. Since the current income tax rate in Massachusetts
is 5 percent, the proposed “millionaire’s tax” would leap to
9 percent — a whopping 80 percent increase in the marginal
tax rate. Assuming the Legislature votes in favor of the
amendment, it’ll go on the state ballot next year. And since
both Senate President Karen Spilka and House Speaker Ron
Mariano have endorsed the measure, the outcome of
Wednesday’s vote is not in doubt.
There is considerable arrogance in the way advocates of the
surtax blithely disregard the voters’ repeated refusal to
overturn the constitutional ban. Their attitude seems to be
that no matter how many times the people uphold the
uniform-rate rule, there is no reason to take them
seriously. But just how serious are the claims of the
pro-tax crowd?
Those pushing for a millionaire’s tax sometimes justify
their demand by insisting that the wealthy don’t pay their
fair share in taxes. But the income tax is not regressive.
Taxpayers making $1 million and up, who earn 22 percent of
all income in Massachusetts, pay 24 percent of all income
taxes. Those million-dollar residents constitute just 0.5
percent of the state’s more than 3.8 million tax filers. Yet
they fork over nearly a quarter of all income taxes paid,
according to data published by the Department of Revenue.
If ever there was a time that state government didn’t
need more money, that time is now. Massachusetts is raking
in tax dollars at a record-busting pace. So far this fiscal
year, state government revenue is nearly $5.7 billion ahead
of where it was last year. That is not only more than Beacon
Hill was anticipating at the start of this year, it is more
than was forecast at the start of last year — before anyone
had heard of COVID-19. And that doesn’t include the
additional $5.3 billion showering down on Massachusetts from
the federal government. The State House News Service summed
up the situation in a headline: “State Awash in Extra Cash
Ahead of Surtax Debate.”
But the strongest argument against the millionaire’s surtax
is that it will deal a body blow to the Massachusetts
economy.
In a study released Tuesday, the Beacon Hill Institute
quantified the effects that will be caused by outmigration,
the relocation from Massachusetts by businesses and
high-income individuals that will be a consequence of a
steep new surtax. Already, nearly $1 billion exits the Bay
State each year, as residents move to low-tax states,
especially Florida and New Hampshire. The proposed surtax
will markedly increase that flow.
The new study calculates that within the first year of
implementation, the surtax will have spurred nearly 4,400
additional families to “vote with their feet” by leaving
Massachusetts. More than 9,300 private-sector jobs will be
lost. Real disposable income will be approximately $960
million below what would otherwise be the case. Income tax
collections will go up, but by considerably less than
the $2 billion surtax proponents predict. And the added drag
on economic activity will cause sales and property tax
levies to fall short as well.
This week, more than 150 Massachusetts businesses
representing almost 16,000 workers sent lawmakers an open
letter imploring them not to hobble the state’s economy with
a stiff new tax, and expressing “alarm” at the proposed
constitutional amendment. They, like the Beacon Hill
Institute’s researchers, know that a surtax aimed at
millionaires is bound to injure countless people who will
never earn anywhere close to a million bucks. That is why
voters have repeatedly pulled the plug on attempts to soak
the rich. If the Legislature insists on going forward with
this latest scheme, voters will have to say no once more.
The Boston Herald
Wednesday, June 9, 2021
A Boston Herald editorial
Numbers don’t add up for millionaires tax
For Democrats, the rich are a gift that keeps on giving —
they double as scapegoat for society’s ills and blank check
for fattening state and federal coffers.
The notion of “paying one’s fair share” has become a
progressive rallying cry — with little heed to the fact that
high earners pay the lion’s share of taxes. According to
2018 government data, the top 1% of income earners — those
who earned more than $540,000 — earned 21% of all U.S.
income while paying 40% of all federal income taxes. The top
10% earned 48% of the income and paid 71% of federal income
taxes.
The left’s notion of “fair” bears watching.
An amendment proposing a millionaires tax, due for a vote in
the state Legislature this week, is the latest foray into
“fairness.” It would add a 4% surtax on income over $1
million.
It’s been the topic of much debate, and study — and when the
numbers are crunched, all that “fairness” looks pretty foul.
The Pioneer Institute released a study in April that found a
millionaires tax would spread the hurt to the middle class,
particularly those bound for retirement.
“Despite its purported goal of taxing only the uber-rich,
the graduated income tax would fail to protect people of
more modest means from overtaxation on one-time windfalls,”
wrote study authors Greg Sullivan and Andrew Mikula. “It has
the ability to push those with significant capital gains and
valuable asset sales into higher tax brackets, punishing
owners of retirement nest eggs and desirable real estate.”
Another Pioneer study found more termites in the wood: the
proposed tax could “devastate” innovative startups dependent
on Boston’s financial services industry for funding.
“Raising taxes on capital gains via a graduated income tax
could devastate the financial services industry in Boston,
which has played a key role in fueling the region’s
innovation economy, as reflected in the numerous tech
startups in Kendall Square and the Seaport District,”
Sullivan and Mikula wrote.
And the more people take a long, hard look at the fiscal
fallout, the worse the idea appears. A new study by the
Beacon Hill Institute found that the millionaires tax could
add up to the loss of jobs, investment and disposable income
for Massachusetts. The study, based on the Institute’s State
Tax Analysis Modeling Program also found that the state
would lose high income households to other states.
In 2023, for example, more than 4,000 families would leave
the Bay State with employment dipping by nearly 9,000 jobs.
Workers will have less disposable income (-$963 million) and
the state’s gross domestic project would shrink by $431
million.
Hardly the formula for a robust post-pandemic recovery.
Progressives are happy to paint high-earners as caricatures,
greedily hoarding the cash they’re not using to light their
cigars.
The reality is that money recirculates, through the large
amount in taxes paid, ventures funded, jobs created.
It looks likely that the millionaires tax will head to the
ballot in 2022 — enough time for people to do their
homework.
As David G. Tuerck, president of the Beacon Hill Institute
and report co-author, noted, “Supporters of the
millionaire’s tax ignore the reality that high income
taxpayers adjust their work effort and their decisions to
save and invest, particularly when they are more willing to
move.”
What is portrayed as a boon for the state looks more like a
bust.
The Boston Herald
Wednesday, June 9, 2021
Hold on to your wallets, it’s Taxachusetts time
By Howie Carr
This is a big day for the hackerama and the
welfare-industrial complex – the Legislature will be
rubber-stamping the graduated income tax onto the 2022
ballot.
Five times Massachusetts voters have said no to having their
pockets picked – in 1962, 1968, 1972, 1976 and 1994 – and
the SJC nixed the same heist a few years back.
But now the gimme guys ‘n’ gals figure the seventh time will
be the charm. This time, the payroll patriots are only going
after “millionaires.” Wink wink nudge nudge.
As usual, this $2 billion theft from taxpayers will be
portrayed as an “investment.” It’s only going to
transportation and education. Oh sure.
Get ready for the media cheerleaders waving their pom-poms
in unison today, telling you this is the greatest thing to
come along since the lockdown. But before the slobbering
begins, try to remember how the hacks would really be
squandering your dough.
Let’s start with “education.” Take UMass — please. There’s a
ZooMass-Boston hack professor by the name of Lorna Rivera.
She’s worth every penny of the $117,512 she makes every
year.
Rivera used to be on the Boston School Committee until last
week, when it came out that she liked to text about how she
was “sick of Westie whites” — meaning people from West
Roxbury, Ward 20.
“Wait until the white racists start yelling at us,”
Professor Hack-Rivera texted another woke committee member,
who responded, “I hate WR.” (Imagine if she’d said, “I hate
R.”)
Racists texting racists about … racism. Your tax dollars at
work. Payroll patriot Rivera blamed her problems on, you
guessed it, “racism,” and she said she’s quitting to
“recuperate.” From what, her own racism?
Moving south, we arrive at UMass-Dartmouth. Did you hear
about the New Bedford city councilor Hugh Dunn? He’s facing
a criminal complaint of drunken driving after an
early-morning crash last month that occurred when he was
backing out of a parking space downtown.
The New Bedford cops said that when they found Dunn in his
car, at first he couldn’t recall his own name. The statesman
was “shaken, confused about the incident, incoherent and was
disoriented and complained of head and back injuries.”
Would you care to guess if Dunn worked until recently in the
dreaded private or the public sector?
Correct. He was UMass-Dartmouth’s “executive director of
economic development and director of South Coast development
partnership.”
He was making $86,284.32 a year until he took a buyout last
year. Prior to his ZooMass hack job, he was a payroll
Charlie for U.S. Rep. William Keating.
But the money from the “millionaires’ tax” won’t just be
going to ZooMass layabouts. Some will be ticketed for the
state’s “gateway cities.”
Here’s the headline on a press release from the U.S.
attorney’s office in Boston last week: “Lawrence Man Pleads
Guilty to Identity Fraud Charges.”
His name was “John Doe,” because the feds can’t figure out
the illegal criminal’s true identity. John — or is it
“Juan”? — stole a U.S. citizen’s identity in order to steal
“approximately $25,081 in MassHealth benefits that he was
not entitled to.”
Vote for the “millionaires’ tax” so that illegal immigrants
in the “gateway cities” can steal even more welfare they’re
not entitled to.
The hackerama also needs more money for corrupt agencies
like the State Police. The latest trooper to get arrested is
one Michael Atton of Wrentham. At age 34, he just got on the
job last year. His base pay is – was — $80,793, and this
year he’d already grabbed an extra $18,743 in overtime and
“other” dough.
But now he’s charged with assaulting his wife, the mother of
his two young children. Like Councilor Dunn, he was
described by the cops as “confused” when they handcuffed
him.
Odd behavior for someone who was supposedly vetted. But in
the Wrentham Police report his wife “said he is a diagnosed
bi-polar person … he denied having any mental health
conditions in order to obtain employment.”
Mrs. Atton and her friend at the apartment complex also
reported that the law-enforcement professional “has planted
alcohol bottles behind her car and photographed them.”
If he can’t save his job, I’m sure Atton will be filing for
a pension. It’s the post-arrest m.o. of all of them. They
start yelling, “I’m disabled!”
And pensions, disability or otherwise, are yet another
reason you should vote for the millionaires’ tax, to keep
the gravy train going for these hacks.
Consider Jimmy Coughlin of Dedham, a retired MSP detective
captain. His brother Bob was a hack state rep who took over
the Mass Biotechnology Council after the indictment of the
previous boss, former House Speaker Thomas “Felon” Finneran.
After 29 years on the job, Jimmy Coughlin retired in 2017
and has since been subsisting on a pension of $131,961 a
year – that’s $10,997 a month. He ran for Norfolk County
sheriff last year, finished third in the Democrat primary.
Last weekend, a 17-year-old kid from Dedham was dragged out
of the bottom of Coughlin’s pool after a Dedham High
graduation party.
This is your hackerama. This is your welfare-industrial
complex. State tax revenues for the fiscal year are already
up $4 billion, billions more are on their way from D.C. …
but now the non-working classes are banging their tin cups
on the steps of the State House, demanding more More MORE!
Go ahead, vote to increase your own taxes. It won’t all go
to racists, illegals, alleged drunks, connected hacks and
layabouts. Some of it will go to regular waste, fraud and
abuse. That’s the Massachusetts way.
The Springfield Republican
Wednesday, June 9, 2021
Massachusetts lawmakers send ‘Fair Share Amendment’ tax hike
on millionaires to 2022 ballot
By Benjamin Kail
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% surtax on household income
exceeding $1 million. Massachusetts has long had a flat
income tax rate of about 5%, 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% has grown at an annual
rate 10 times greater than the bottom 90%. “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% 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
[sic - correct citation is
Citizens for Limited Taxation] 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% 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.”
State House News Service
Wednesday, June 9, 2021
Lawmakers Advance Income Surtax to 2022 Ballot
O'Day Expects Opponents to Spend "Tons of Cash"
By Colin A. Young
With a vote of the House and Senate Wednesday afternoon, the
Massachusetts Legislature effectively kicked off a
year-and-a-half-long ballot campaign around the proposed
constitutional amendment to increase taxes on the wealthy
and move away from the state's flat income tax rate
structure.
The House and Senate, meeting jointly in a Constitutional
Convention to consider proposed amendments to the state's
Constitution while the State House remains closed to the
public, voted 159-41 Wednesday to let voters decide on the
2022 statewide ballot whether to impose a new 4 percent
surtax on annual household income over $1 million. The
measure (S 5) needed 101 votes to advance.
Only one Republican, Sen. Patrick O'Connor of Weymouth,
voted to advance the amendment while nine Democrats -- Reps.
Brian Ashe, Ann-Margaret Ferrante, Michael Finn, William
Galvin, Colleen Garry, Chris Markey, Angelo Puppolo, Paul
Schmid and Jonathan Zlotnik -- voted in opposition.
The vote marks the successful conclusion of the legislative
process for surtax supporters led by Raise Up Massachusetts,
the coalition of labor, community and faith-based groups
that has secured minimum wage increases, a new paid family
and medical leave program and guaranteed earned sick time in
recent years. But it also marks the start of a campaign to
convince regular voters around Massachusetts to
substantially reshape the state's tax structure.
"Taxpayers at the lower end of the income scale pay a
greater percentage of their annual income in state and local
taxes than our higher-income taxpayers do. This is deeply
unfair," Sen. Jason Lewis, who co-sponsored the amendment in
the Legislature, said. "The fair share amendment that is
before us once again today would make our tax system more
equitable, and it would raise substantial new revenue to
support public investments that are critical to our recovery
from the pandemic and to building a more just economy."
Democrats on Beacon Hill have been pursuing the tax policy
change for years and supporters say the surtax could
generate $2 billion per year, earmarked for education and
transportation, without dipping into the pockets of most
residents. The change is proposed as a constitutional
amendment because the Constitution currently requires that a
tax on income be applied evenly to all residents. The state
income tax rate is currently 5 percent.
If the surtax is approved by voters, the first $1 million of
household income would still be taxed at the 5 percent rate
and all household income above and beyond that first $1
million would be taxed at an effective rate of 9 percent.
Before the 200 elected representatives and senators voted,
debate on the topic followed the same contours that have
defined the issue for the last several years. Supporters
like Lewis and Rep. Jim O'Day argued that the amendment is
necessary to combat income inequality in Massachusetts and
to provide a sustainable revenue source for education and
transportation. Opponents like Minority Leaders Rep. Brad
Jones and Sen. Bruce Tarr cautioned that the surtax will
likely affect more than just the taxpayers who already
report household income over $1 million and warned that it
could lead to an exodus of wealthy Bay Staters.
"We know that this will not only affect folks that have
incomes, year after year, of a million dollars, it will
affect the incomes of folks that may be proprietors of small
businesses and those who would sell a home. And we know ...
that even if that were not true, the effect of the question
would be to place the burden of the promise that would be
made by this amendment on 20,000 taxpayers -- roughly, that
number changes -- who've already exhibited highly-mobile
behavior," Tarr said. He added, "In good conscience, I have
to sound the warning of all of the things that could happen
here that I don't believe anyone in the commonwealth of
Massachusetts would want to see."
While labor unions, progressive-minded organizations and
Democratic lawmakers celebrated, condemnation of the
Legislature's vote came swiftly Wednesday afternoon.
Paul Craney, a spokesman for the Massachusetts Fiscal
Alliance, said Beacon Hill Democrats "will use today as a
rallying cry to raise taxes on the rich and if they are
successful, they will make sure we are all considered rich
when the taxes are due."
The Massachusetts chapter of the National Federation of
Independent Business said it was disappointed that the
Legislature advanced the graduated income tax proposal and
warned that it will harm small businesses already hurting
from the pandemic.
"The proposal's supporters conveniently omitted that many
small businesses who file as pass-through entities for tax
purposes will be impacted by the higher tax rate," NFIB
State Director Christopher Carlozzi said. "Those business
owners who spent a lifetime building their business,
providing jobs, paying taxes, participating in their
communities, will be penalized with a higher taxes when they
sell their business to retire."
During his floor remarks, O'Day pre-emptively rejected
similar claims from opponents by claiming that "businesses
earning over a million dollars, in my estimation, are not
small businesses."
The West Boylston representative also shot down the argument
that the passage of the surtax amendment would kick off a
trend of wealthy residents and businesses packing up and
moving out of Massachusetts.
"The fair share amendment has been a topic of discussion for
at least eight years in one form or another," he said. "If
businesses and billionaires really wanted to leave -- it's
not like we're just pulling this out of a bag last night to
talk about it, we've been talking about it ad nauseam -- if
they didn't like it here, they would have left long before
now."
Income Surtax, Take Two
The initial petition that launched the surtax effort was
filed in August 2015 by Raise Up. Attorney General Maura
Healey certified the constitutional amendment as
ballot-eligible in September 2015, and the Department of
Revenue concluded that year it would generate about $1.9
billion in revenue annually.
The Democrat-controlled Legislature twice endorsed the
citizens petition for the 2018 ballot despite Republican
opposition, voting 135-57 in 2016 and then 134-55 to advance
it in June 2017.
But then the wheels fell off. Three major business groups --
the Massachusetts High Technology Council, Mass. Taxpayers
Foundation and Associated Industries of Massachusetts --
filed suit, which worked its way up to the Massachusetts
Supreme Judicial Court. In June 2018, the SJC tossed the
question from the ballot, ruling that it improperly mixed
two different spending priorities and a major change in tax
policy.
The state Constitution allows initiative petitions to
contain only subjects that are "related" or "mutually
dependent," and the lawsuit argued that the proposed surtax
improperly bundled unrelated subjects of a graduated income
tax and spending on education and transportation.
Democrats have gotten around that rule this year by having
legislators, who are not bound by the same restrictions,
file the petition directly.
In June 2019, House and Senate members voted 147-48 in favor
of the amendment, setting themselves to send the question to
voters with their vote Wednesday.
Aside from letting the income tax rate fall in small
increments in recent years to 5 percent, the level voters
approved in a 2000 ballot question, Beacon Hill has largely
steered clear of changes to the state's two big taxes --
sales and income -- since 2009, when the Legislature raised
the sales tax rate from 5 percent to 6.25 percent.
Wednesday's vote took place while Massachusetts is flush
with cash. Legislative leaders and the governor are playing
tug-of-war over control of about $5.2 billion in federal
American Rescue Plan Act funding and the Department of
Revenue is on pace to collect nearly $4 billion more in tax
revenue than the Baker administration expected it would this
fiscal year.
The November 2022 Ballot
The income surtax amendment could become something of a
center of gravity for the 2022 election cycle in
Massachusetts, especially in the race for governor.
Ben Downing, a former Democratic senator who is running for
governor, said Wednesday he looks forward to working to pass
the ballot question in 2022 and called it "a chance for us
to begin to remedy the inequity that plagues our state and
build a fairer, stronger Massachusetts for all 351 cities
and towns."
Gov. Charlie Baker has not said whether he intends to run
for a third term in 2022 and he's also not outlined a clear
position on the income surtax. Baker's office did not offer
a response to Wednesday's vote, but the Republican governor
generally does not favor tax increases.
All of the state's Constitutional offices and all 200 seats
in the Legislature will also be on the November 2022 ballot,
and Mass. Fiscal suggested that's when voters could let
Democrats who advanced the surtax amendment know how they
feel about it.
"The voters should not forget or forgive this level of greed
and they will have another chance to hold them accountable
in 2022," Craney said.
Surtax supporters were confident about going to the ballot
in 2018, too, before the SJC derailed that campaign. Raise
Up and the legislative sponsors said after Wednesday's vote
that they are confident the question will actually go to
voters next year but acknowledged that the campaign will be
long and bruising.
"We feel that we're on really solid ground, but I'm sure the
opponents of this are going to look under any rock, every
rock, to try to find some kind of way from preventing
themselves from having to pay their fair share," O'Day told
reporters in the hallway outside the House Chamber. "They
are the ones, obviously, that will have the ability to throw
a ton of cash at this issue and that's probably how they're
going to try to beat it. They'd rather spend $100 million on
defeating this than spend an extra $40,000 or $50,000 in
taxes. It doesn't make a great deal of sense to me if you
want to be a good neighbor."
— Chris Van Buskirk and
Michael P. Norton contributed to this report.
The Boston Globe
Wednesday, June 9, 2021
Massachusetts Legislature overwhelmingly advances
millionaires tax proposal to 2022 ballot
By Matt Stout
Massachusetts lawmakers overwhelmingly voted Wednesday to
advance a sweeping change to the state tax code to the 2022
ballot, kickstarting what’s expected to be a bruising
political debate over whether the wealthiest residents
should pay more in taxes.
By a 159-41 margin, the House and Senate gave its approval
to a proposed constitutional amendment that would impose a 4
percent surtax on annual personal income above $1 million.
The measure could generate billions in revenue that
supporters say could improve the state’s schools, roads, and
subways.
The Democratic-dominated chambers easily cleared the
101-vote threshold needed to advance the so-called
millionaires tax, and ensured that it cleared the last
procedural hurdle to go before voters in November 2022, when
the governor, each statewide office, and every seat in the
Legislature will also be on the ballot.
The Legislature first approved the proposal, 147-48, in 2019
and had to advance it in consecutive legislative sessions
before it can make the ballot. If approved by voters, the
measure would take effect the following January and reshape
the state’s traditional flat income tax rate, currently set
at 5 percent.
Beyond that, little is certain. Both sides are already
challenging projections of how much revenue the higher tax
rate would raise. The same measure was headed to voters in
2018 before the Supreme Judicial Court rejected the ballot
question as unconstitutional, raising questions if another
legal challenge could emerge. Dueling arguments over how
large an impact the tax change could have on small
businesses are already percolating.
“All of us here today want to help small businesses,” said
state Representative Jim O’Day, a West Boylston Democrat who
co-sponsored the amendment. “I think their businesses could
not run in this commonwealth if we did not have road and
bridges that were safe and secure.”
The state Department of Revenue projected nearly six years
ago that the measure could generate anywhere from $1.6
billion and $2.2 billion in revenue each year. Since then,
the number of millionaires in Massachusetts have jumped to
more than 20,000.
Supporters, including labor unions and progressive
activists, say those extra billions are badly needed to help
finance the state’s new school funding system passed in
2019, which promised hundreds of millions in additional aid
to school districts each year.
House Speaker Ronald Mariano, a Quincy Democrat, and Senate
President Karen E. Spilka, an Ashland Democrat, both back
the change, saying it would usher in a more “equitable and
hopeful future.”
Governor Charlie Baker repeatedly declined to take a
position on the tax measure in 2018, but has consistently
signaled his opposition to hiking taxes, except for funding
a new, specific purpose. “I’ve said many times that I don’t
think the solution to Massachusetts issues or problems is to
raise taxes and I’ve said that many times,” Baker said in
2019.
The proposed amendment has long drawn heated opposition from
business leaders and others. A study released Tuesday by the
Beacon Hill Institute, a right-leaning think tank, and
funded by the Fiscal Alliance Foundation, a conservative
nonprofit, challenged previous estimates, saying the measure
would raise $1.2 billion in its first year and roughly $1.5
billion by 2027.
The study also said that the higher tax rate would cost the
state more than 9,300 private sector jobs in 2023, arguing
highly paid earners would leave Massachusetts for lower-cost
states.
“The first effect reflects how Massachusetts residents would
vote with their feet once the amendment was implemented,”
the study said.
House and Senate Republicans echoed those arguments
Wednesday, warning that the tax change is no panacea. State
Senator Bruce E. Tarr, the chamber’s minority leader,
wielded props to make his point, brandishing a shoe box
labeled the “Tax Alchemy Box,” arguing that mixing various
ideas and arguments together will not produce gold.
For example, Tarr argued, while the amendment dictates the
newly raised revenue goes toward transportation and
education, it makes the money “subject to appropriation,” a
technical inclusion that gives the Legislature authority in
how it’s spent.
“I respect the goals that they’re trying to achieve,” Tarr,
a Gloucester Republican, said of supporters. “But in good
conscience I have to sound the warning.”
Wednesday’s vote came at a time when Massachusetts appears
flush with cash. State officials said last week that the
Department of Revenue collected more than double the tax
revenue than it had expected in May. The state has now
pulled in $3.9 billion above projections through 11 months
of the fiscal year, and $1.36 billion more than it expected
to collect for the entire fiscal year that ends on June 30.
State lawmakers this week also sent to Baker a bill that
would give them control over how to spend nearly $5.2
billion in federal COVID stimulus money, potentially over
several years.
CommonWealth Magazine
Tuesday, June 8, 2021
Claims for millionaire tax don’t add up
Would trigger job losses, cutting into revenue gains
By David G. Tuerck and Lauri Belsito
As it meets in a constitutional convention on Wednesday, the
Massachusetts Legislature has another opportunity to approve
the so-called millionaire’s tax, paving the way for the
measure to appear on the November 2022 ballot.
This latest campaign to make the state’s flat tax into a
graduated income tax would impose a 4 percent tax surcharge
on incomes of $1 million and more. Six past efforts to
impose a similar graduated income tax scheme have failed at
the ballot box and, more recently, the state’s highest court
rejected it as “unconstitutional.”
However, past failures and even the will of the voters have
not deterred the proponents. Unlike every single past
attempt, this latest attempt is not derived by citizens, but
by lawmakers, who want to seek to change the protections in
the state constitution and be able to tax at will. While
they claim the measure is about raising taxes on high-income
earners, what they are attempting to change is the
constitutional protections that are enshrined in the state
constitution to protect taxpayers from unequal taxation.
Proponents of the millionaire tax make two central claims.
First, they argue that the tax will impinge only on the
Commonwealth’s highest earners while leaving everyone else
unaffected. Second, they promise that the revenue generated
from the next tax will raise some $2 billion annually, all
of which will go toward spending on education and
infrastructure. Both claims are false.
Both claims rest on the premise that it is possible to raise
taxes on a small but high-earning group of taxpayers without
triggering reductions in employment and investment. But look
at the data. The millionaire tax imposes an 80 percent tax
increase on 20 percent of state income. It is simply not
believable that the .6 percent of taxpayers who are affected
by this tax increase will go on hiring, working, and
investing in Massachusetts at the same pace they did before
the tax increase was imposed. Instead, some of them will
move to states like New Hampshire or Florida that impose no
income tax at all.
Massachusetts is already suffering from net outmigration, a
problem that the millionaire tax will exacerbate. Other
workers will retire earlier or simply cut back on their work
hours. Thousands of businesses will reduce their investment
and hiring as the after-tax return on investment falls. The
resulting shrinkage in the state economy will adversely
affect taxpayers at all income levels and reduce the amount
of revenue that the tax will yield.
In a
study released today sponsored by the Fiscal Alliance
Foundation, we used the Beacon Hill Institute’s State Tax
Analysis Modeling Program (STAMP) to determine that the tax
would drive 4,388 working households (households with at
least one employed person) out of the state in its first
year of implementation. Private sector jobs would
simultaneously fall by 9,329. Because income taxes would
rise, disposable income would fall by $963 million, and
state economic output would fall by $431 million.
Because of this shrinkage in the economy, state tax revenues
would rise by only $1.231 billion, not by the promised $2
billion. This should be a clear warning to taxpayers, who
should ask themselves where will the rest of the taxpayer
money come from in order to satisfy the spending by State
House politicians. That would be you, of course.
As for the promise to dedicate the revenues raised by the
tax to education and transportation, that, too, is
misleading since there is no stopping the Legislature from
diverting revenue already raised for those purposes to other
programs.
When we consider the actual effects of the millionaire tax,
the case for implementing it becomes unconvincing. The state
would get a very low return on its experiment with a
graduated tax. Another billion or so dollars, when compared
to the $45.6 billion that the state would spend under the
governor’s fiscal year 2022 budget, will mean very little.
Revenue collections for fiscal year 2021 are already $4
billion ahead of last year FY 2020 and there are further
questions to be raised about the desirability of lavishing
more money on state transportation without serious attention
to its notorious inefficiencies or on the
already-well-funded education sector. Let’s leave the state
constitution as it is, and avoid burdening the state
economy, still in recovery from the pandemic, with another
tax.
— David G. Tuerck is
president of the Beacon Hill Institute and Laurie Belsito is
policy director of the Fiscal Alliance Foundation.
State House News Service
Tuesday, June 8, 2021
On Eve of Tax Vote, Study Predicts Job Losses
Lawmakers Appear Ready to Move Away From Flat Income Tax
Rate
By Matt Murphy
A day before lawmakers plan to vote on whether to put a
constitutional amendment on the 2022 ballot to raise taxes
on the wealthy, opponents are challenging the assertions by
Democratic leaders that it could raise $2 billion for
education and transportation with new research suggesting
the tax would cost jobs and produce significantly less new
revenue.
A study done by the Beacon Hill Institute for Public Policy
Research estimates that if wealthy earners in Massachusetts
were forced to pay a 4 percent surtax on all income over $1
million it would generate $1.23 billion in new taxes in
2023.
That estimate, which climbs to $1.5 billion by 2027, is
substantially less than the roughly $1.9 billion projected
by the Department of Revenue six years ago.
BHI President David Tuerck and Director of Research William
Burke also said the so-called millionaires tax would cost
the state 9,329 private sector jobs in the first year and
reduce the number of working households by 4,388, mostly due
to high earners leaving Massachusetts for lower cost states.
"The reason it will raise less revenue than predicted is
because the proponents don't bother to figure out what it
will do to the state economy," Tuerck said on a conference
call organized by the Massachusetts Fiscal Alliance
Foundation.
Proponents for years have rejected arguments that the surtax
on those earning over $1 million would prompt the wealthy to
leave Massachusetts, and continue to make the case that
despite the influx of tax dollars and federal COVID-19
relief funding the income surtax is needed to create a
long-term funding source for education and transportation.
The last time the Department of Revenue looked at the
proposal was in 2015 when it projected that by 2019 the
income surtax would hit 19,650 tax filers and generate
between $1.6 billion and $2.2 billion. The most recent data
from the Internal Revenue Service show that Massachusetts
had 20,040 filers in 2018 with adjusted gross income in
excess of $1 million, accounting for nearly $70.7 billion in
income.
"It's not a surprise that another think tank funded by
multi-millionaires are arguing they shouldn't pay more in
taxes, but the people in Massachusetts understand the
million dollar earners have not been paying their fair share
and can afford to pay a little more to make the investments
we all need to thrive," said Andrew Farnitano, a spokesman
for the Raise Up Coalition.
Farnitano said the coalition "defers to DOR on revenue
estimates" because it has direct access to taxpayer data,
but noted that the fear of millionaire migration to low-tax
states like New Hampshire or Florida has been downplayed by
some research, including a 2014 study out of Stanford
University.
That report found that while millionaires do move around for
various reasons, very little evidence points to changes in
high-income tax brackets as a motivating factor.
Raise Up, a coalition of labor, faith and community
organizations, first tried to put the millionaires tax
proposal on the ballot in 2018, but it was struck down by
the Supreme Judicial Court as ineligible.
This time the amendment has been proposed by Rep. James
O'Day of West Boylston and Sen. Jason Lewis of Winchester,
rather than as a citizens petition, resolving the issues
raised by the court and putting the amendment one vote away
from the 2022 ballot.
Senate President Karen Spilka and House Speaker Ron Mariano
have teed up the proposal for Wednesday afternoon when it
will need the support of at least 101 of the 200 House and
Senate lawmakers on Beacon Hill to advance to next year's
ballot.
When the proposal last went before the Legislature for a
vote in 2019, it passed with 147 legislators in support. A
second vote is required during this legislative session for
the amendment to progress to the ballot.
Paul Craney, the spokesman for the Mass Fiscal Alliance
Foundation, said it's important that legislators have
information on the tax's impact before they vote Wednesday,
and if it does pass he said he's "optimistic" voters will
reject it.
"They usually make the right decision on this," Craney said,
pointing to the defeat in Illinois last year of a ballot
question to implement a graduated income tax.
Burke said that BHI's analysis projects that the
Massachusetts economy would shrink as a result of the new
income surtax, with the think-tank's model projecting a $431
million decrease in gross state product, a $931 million
decrease in real disposable income and $7 million in lost
investments.
Tuerck also called it a "dangerous claim" that proponents
make when they say the money will be allocated for education
and transportation, calling the money "fungible" and noting
there's nothing to stop the Legislature from using the
income tax revenue to replace, rather that add to, money
already being spent in those areas.
Tuerck also questioned the underlying need for more revenue,
suggesting Massachusetts was already among the most generous
in the country when it comes to per-pupil spending on public
schools.
"Why do we really need to increase spending on education?"
Tuerck asked.
"We're raising substantially more revenue that we have
historically in Massachusetts and nobody would look at the
current budget and say we have a tax revenue crisis in the
state. We do not. We don't have a transportation and
education crisis. What we have a is lot of money flowing
into the Treasury because of the recovery we're having," he
said.
State government is on track to end the fiscal year on July
1 with a substantial surplus as tax collections have
outpaced the pessimistic pandemic projections of lawmakers
and economists, and the Legislature is also starting to
consider how it wants to allocate $5.3 billion in federal
relief money over the next several years.
"This is the wrong tax increase at the wrong time," Tuerck
said.
Farnitano, however, said the wealth tax is about creating a
"sustainable and long-term funding source" that will be
there after the federal relief dollars are spent.
He pointed to the need to hire teachers, replace aging
regional transit buses and make college more affordable for
students, including non-traditional students who may be
forced to think about a career change as a result of the
pandemic.
"This constitutional amendment is not about one budget cycle
or one economic cycle," he said.
State House News Service
Wednesday, June 9, 2021
Constitutional Convention Summary
Votes to Send Income Surtax to 2022 Ballot
By Chris Van Buskirk
The question of adding tax policy (S 5) into the state's
Constitution for the first time in Massachusetts history
will be placed before voters in 2022 in the form of a four
percent surtax on incomes above $1 million after lawmakers
advanced the so-called Fair Share Amendment Wednesday
afternoon. Legislators voted 159-41 in favor of the proposal
during a Joint Session, picking up a number of votes since
the last time lawmakers took up the amendment.
Advocates say the state stands to gain over $2 billion in
revenue that would be earmarked for education and
transportation investments while opponents say wealthy
individuals and businesses could end up leaving the state
because of higher tax rates.
"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 more equitable for everyone," said Sen. Jason Lewis
(D-Winchester).
House Minority Leader Brad Jones said he fundamentally
disagrees with adding tax policy into the Constitution,
saying if lawmakers make a mistake with the Fair Share
Amendment, it will take a four-year process to fix. He
pointed to a 2013 tax on technology services that lawmakers
and Gov. Deval Patrick repealed months after they passed the
measure.
"There's precedent in the last decade. We did the tech tax,
2013, without understanding the ramifications, and within a
matter of months, we repealed it," the North Reading
Republican said. "If we mess up on this, guess what,
four-year process, four-year process."
The Constitutional Convention also represented one of the
first times a large group of people -- by one count, around
80 people -- have gathered in the House Chamber since a
rules debate over the summer of 2020 prompted House
Democrats and Republicans to flood the chamber. The
Constitutional Convention is scheduled to return to session
on Monday, Oct. 25 at 12 p.m.
Constitutional Convention Debate on S-5
The
"Fair Share
Amendment"
Wednesday, June 9, 2021
Courtesy of the State House News Service report
Members of the Senate entered the chamber at 1:17
p.m. and House members clapped as the Senate
Sergeant-at-Arms, Senate President Spilka, Senate
Minority Leader Tarr, Sens. Rodrigues, DiZoglio,
Boncore, Timilty, and others walked into the
chamber.
Senate President Spilka assumed the rostrum and
spoke to the Senate clerk. Majority Leader Cronin
and Rep. Cusack stood behind them. Several Senate
and House aids conversed in the well, near the House
clerk's desk, and on the rostrum.
CONVENES: A Constitutional Convention convened at
1:25 p.m. with Senate President Spilka presiding.
Majority Leader Cronin and Rep. Cusack were also on
the rostrum.
PLEDGE: Members, staff, and guests pledged
allegiance to the U.S. Flag.
Senate President Spilka said the gentleman from
Ipswich doubts the presence of a quorum. The chair
orders a quorum roll call forthwith.
QUORUM CALL: Senate President Spilka declared a
quorum at 1:40 p.m. with 200 members indicating
their presence across both branches.
FAIR SHARE AMENDMENT: Question comes on
agreeing to the amendment S 5 to the Constitution to
provide resources for education and transportation
through an additional tax on incomes in excess of
one million dollars
Sen. Lewis said: I appreciate this
opportunity to speak once again in support of the
Fair Share Amendment. This proposal to assess an
additional income tax of four percentage points on
annual income above $1 million and invest the
proceeds in public education and transportation has
been discussed and debated for many years. It has
been voted on in three previous Constitutional
Conventions and it has received strong support every
time.
In public polling this proposal receives support
from 70 percent of voters in the state. The reason
why the Fair Share Amendment is popular is that
people recognize wealthy residents can afford to pay
a bit more in taxes to help fund investments that
expand opportunity and make the state more just.
From WWII through the late 1970's economic growth
and prosperity in our state and nation was broadly
shared. Since 1979, however, average income for the
top 1 percent has grown at an annual rate that is 10
times greater than the average income for the bottom
90 percent. And this is not because working people
aren't working hard enough. In fact they are working
longer hours and oftentime multiple jobs.
Worker productivity has increased 65 percent since
1970 and yet working families are struggling to get
by every single day in the state -- living one
paycheck to the next. They are tapped out with the
high costs of housing, health care, and other day to
day expenses and for many of our young people the
American dream seems impossible for them. Income and
wealth inequality have reached levels not seen since
the 1920s.
And we have to face the fact that our state is one
of the most unequal in the nation. Of course, we
know the pandemic has further exacerbated economic
and racial inequities. While it is true that a
number of different factors have contributed to
inequality, our state's tax policy is one of these
factors.
And unlike the forces of globalization or
technological changes or federal policies, state tax
policies are within our control -- we can change
them. Our current tax system in the state is
regressive. In other words, tax payers at the lower
end pay a greater percentage of their annual income
in state and local taxes than our higher income
taxpayers do. This is unfair.
The Fair Share Amendment that is before us today
would make our tax system more equitable and it
would raise revenue for public investments to
recover from the pandemic. It will provide funds to
continue implementing the Student Opportunity Act.
It will provide funds for public higher education to
be more affordable for students of color. It will
provide funds to expand access to high quality pre-K
and it will provide funds to improve our roads,
bridges, sidewalks, trails, and public transit.
Now, critics of this amendment claim that
millionaires will flee Massachusetts especially now
that remote work is popular -- and yes some may
move. Maybe they were already thinking about
retiring in Florida or Arizona. But overwhelming
evidence from studies suggest that most of the high
income households will not leave the state because
of higher tax rates.
There are many good reasons to stay in
Massachusetts, in fact investments in a stronger
education system and transportation infrastructure
will strengthen our economy and make us a more
desirable place to live, work, raise a family, and
build a business. With a 9 percent top marginal tax
rate, we would be in line with many other high
income states that are generally viewed as our peer
states. Even many red states have top marginal
income tax rates that are well above our current
five percent rate.
I want to thank the Speaker and Senate President and
Rep. O'Day, the Raise up Mass Coalition and
everybody who has worked so hard for years to
advance this amendment. I urge you my colleagues to
vote in favor of this amendment and send it to the
November 2022 ballot so voters can have the final
say.
Rep. Jones said: I hope the amendment
is not agreed to and I appreciate the remarks from
the gentlemen from Winchester, but I disagree.
We are sent here with the consent of the governed
and their trust. And historically we have betrayed
that trust on tax policy frequently.
In 2000 the voters said they wanted a five percent
tax rate, and we substituted our judgment for theirs
-- 17 years later we got to five percent.
In 2000 voters said they wanted a charitable
deduction and in 2002 we substituted our judgement
for thiers. And we don't have one today. It was to
take effect this past January and we delayed it in
the FY21 budget. We have delayed it again in the
FY22 budget. Betraying the trust of the voters, the
consent of the governed.
Now we are being asked to add four percent on people
who make over $1 million a year. We are telling them
we are going to spend it on public education and
transportation. The gentleman who preceded me talked
about trails. Raise Up said sidewalks and bike
paths. That is different from the proposal's
language. The reality is we are never going to
fulfill all the promises.
There is a philosophical reason. I don't think we
should put tax rates into the Constitution.
Blue states and red states, my guess is that none of
those states have rates in their Constitutions. And
there is a reason for that. If you make a mistake we
can fix it, we can adjust it. There is precedent in
2013 with the Tech Tax which we passed without
understanding the ramifications and within months we
repealed it. If we mess up on this, it's a four year
process. So if any of the bad things, some, more, or
all, it is a four year process to fix.
Now previously, I offered an amendment that said if
you are serious that this money is going to go to
transportation and education let's promise it is on
top of what we already promis. This body rejected
it. Despite the fact that we have a history of not
supporting the will of the voters, I would argue
that we have betrayed their trust too many times.
I find it curious that we stand here today taking
this issue when we have $5.2 billion sitting in
account for us to spend, revenues for FY21 budget
are exceeding the wildest expectations with some $4
billion ahead of where we thought we would be. And
we don't have a clear understanding of why that is
happening because a year ago we were talking about
less money coming in. So we should understand why
that is happening before we do this because we don't
need to do this. I hope the amendment is not agreed
to.
Sen. Tarr said: we are gathered
together for the solemn obligation for making a
determination of what should be placed on the
November 2022 ballot in the state as a matter of tax
policy. That is an obligation that we take seriously
and I appreciate the arguments that have been made
by proponents although I disagree with their
conclusions.
As I listened to the gentleman from Winchester, I
heard the resonance of redistribution of wealth. If
we want to have that discussion we should have it
not in the context of taxation but other public
policies. How do we ensure that we have a fair tax
policy in the state and one that will not have
unintended consequences. To express the essence of
what is happening here, I do have one very simple
visual aid.
Sen. Tarr held up a white, paper box he later dubbed
as the "Tax Alchemy Box" as he spoke from the floor
of the House Chamber.
Sen. Tarr continued, So, if we were going to try to
put together an amendment that would be popular and
have it appealing to many people, then we would put
many different elements into it that make it
appealing. So I have represented that here with the
Tax Alchemy Box where you put ingredients together
that sound good and hope you take things that might
work together and you come up with gold.
Don't we want that magical solution that will solve
all the issues that we think we need to face. As
this amendment has been developed, there were a
number of things that have gone in: one is tax
fairness and the thought that somehow the tax policy
we have now is somewhat unfair and we need to remedy
that.
In addition, we hear that we are going to have funds
for education and transportation, very important
and, in fact, we do so at very substantial rates in
the current tax policy.
And then comes one of the poignant points, is that
we need to tax the rich, those who earn more than $1
million. Not us. The folks that earn above a million
and of course we know that will never be us. And
these are the only people that will be affected. So
let's get the folks that are getting paid above $1
million.
Another point, about the limited impact of this tax,
it will only affect those people, not us. Just the
$1 million plus earners. What else would you want in
a ballot question, sustainability. Some
pronouncements have been made that enacting this
would provide a good long term source of revenue.
So, we take all of these things and we shuffle them
up and we put them in the box, the Tax Alchemy Box
and then we go and put this on the ballot. But when
you get done combining these things and look at the
real impact, you get the words subject to
appropriation which those of us in the Legislature
understand as this money may never be spent at all.
So the idea that somehow this amendment will respond
to priorities, well that isn't necessarily the case.
Now, we talk about tax fairness, and there have been
some assertions made relative to the need to change
the tax code in the Constitution, where it cannot be
changed except for a lengthy process. The suggestion
is that somehow the tax code is unfair until we look
at statistics indicating 24 percent of all state
income taxes are paid by .5 percent of state
taxpayers.
Now, that's when we look at the state income taxes
and something that didn't make it into the box is a
measurement of when you look at federal and state
rates of taxation and we realize that if we look
just a few years ago we would see that taxpayers
with income of more than $1 million had an average
income of $3.7 million and paid more than $1.2
million in state and federal taxes for effective
rate of 32.8 percent.
The other taxpayers had an average income of
$70,000, paid $14,000 in taxes for an effective rate
of 18.9 percent. That apparently is something that
we are trying to fix in the name of tax fairness.
Now, we also heard going into the Tax Alchemy Box
that we are going to tax the rich of above $1
million and it will have limited impact unless you
happen to be the proprietary of a Subchapter S
Corporation trying to emerge from the pandemic, or
unless you live in the family home for decades and
you decide to sell it and now guess what you are a
millionaire. So much for the limited impact of this
measure.
When it comes to sustainability, it is interesting
to think about the consequences of what we do. And
so, when we come out of the other side of the Tax
Alchemy Box, we see if the proposal that's been
made, and the representations that have been made
about it are accurate, we are now putting a
significant part of the state budget on 20,000
taxpayers. So if you believe that this only affects
those folks, which it will not, but if you believe
that, then 20,000 taxpayers would have on their
shoulders the increase of revenue we will get.
What do we know about them? They are highly mobile,
sophisticated, and have the ability to do something
called out migration -- now I know there have been
representations made here that out migration is
overstated and does not exist. I would point out
that not only does it exist I would say that the way
to avoid taxation is not only to move out of a
astate physically but also your assets that might be
taxed.
In this state with regard to out migration, possibly
because of our current tax policies, according to
the IRS between 1993 and 2018, the state experienced
an accumulative net outflow of $20.7 billion in
taxable income. $20.7 billion has already left the
state. Hard to dispute that that isn't real. So if
that is what is happening now, imagine what happens
when we change the dynamic, when those earning above
$1 million have their taxes increased again by tens
of percentage points to the point where 30 percent
of their income goes to federal and state taxes.
Well fortunately, we have some experience to look at
and the experience we can look at are places like
California, ,which in 2012 enacted a measure that in
many ways was similar to this one. The legislature
said we are going to get those rich people that get
above $1 million. And what happened? Well behavioral
responses of those in that category eroded 45.2
percent of the windfall, the increased revenues in
the first year. And by the second year 60.9 percent
of those revenues were gone. We see similar
experiences in other states which have attempted to
do something similar --- Connecticut, New Jersey, in
other places.
So I know that the thought might be well lets just
advance this but I believe we have a responsibility
to make sure that before we advance something we
understand to the best extent we can [what] the
consequences be and we have to think long and hard
whether or not we want to in the name of creating
fairness, that we need to think about the fact that
we would suggest to the residents that it will
provide additional resources for education and
transportation when we know there is no guarantee of
that. The words that went into the Tax Alchemy Box
show that.
This will not only affect folks that have incomes of
$1 million plus each year but also folks that are
proprietors of small businesses and would sell a
small home, the effect of the equation would be to
place the burden of the promise on 20,000 taxpayers,
roughly, who have already exhibited mobile behavior
and when you look between 1993-2018 that results in
$20 billion in taxable income leaving the state.
And, you would do that, likely in the context of
spending that would increase because of the great
windfall that would be predicted to come from this
ballot question if it were to pass.
Before we advance we question, it is time to think
about those things. We need to put all the factors
in the box and shake it again and see if when you
empty it out, it makes sense, it is accurate, it
will have no unintended consequences, and there
would be recourse if we made a mistake to be able to
correct that mistake rather than for the first time
putting a tax rate in the Constitution.
I respect the proponents of this proposal and their
goal, but in good conscience I have to sound the
warning of all the things that could happen here
that I don't believe anyone would want to see. I
hope the amendment is not agreed to. Thank you.
Time was 2:11 p.m.
Rep. O'Day said: good afternoon, Madam
President, thank you for allowing me to come to the
microphone this afternoon. I know I have my mask on.
But my parents always told me I had a face for
radio. So I didn't know whether to take it off or
not. So I will do the pleasure and take it off.
But thank you. I did not realize, however, that I
was going to be following a true magician. And my
idea around magicians is always, there's always
something up their sleeve. And oftentimes what
they're doing is an illusion.
And so I need to try to figure out from what my dear
friend from Reading had to say about we're having a
difficult time figuring out all the revenue that's
continuing to come into the state. But then I hear
the magician from Gloucester, the Senator from
Gloucester, telling us how billions of dollars have
been leaving the commonwealth. Those two situations
just do not seem to add up to me. So as we think
about sleight of hand, I think we also need to be
concerned about what the figures actually represent.
You know, before I get to the crux of the matter
here today, though, I really would like to make
something clear. Back in 2019, when we first tried
to begin talking about in the Constitutional
Convention, the Fair Share Amendment, there was a
lot of misunderstandings and misidentifying of who
the actual sponsor of the Fair Share Amendment was
at that time. There was a lot of confusion between
one of my colleagues from Stoneham and myself. There
are some differences. There are some similarities in
our names, but today I think as you look here, you
can tell that I'm much taller, much younger, and far
more handsome than the gentleman from Stoneham. So I
hope that those that were making those mistakes
previously can understand now who Representative
O'Day is and who the gentleman from Stoneham is.
So we're here today to talk about the Fair Share
Amendment. Remember, back in 2015, 150,000 citizens
of Massachusetts signed on to whether or not this
Fair Share Amendment should be put on the ballot for
one reason or another. That was shot down.
For years the state has tried to address two very
substantive and consequential areas of concern to
us: education and transportation. Without
investments in these common goals, we are ignoring
our neighbors and setting communities up to fail.
Talk to the commuter who drives an hour and a half
from work every day. Talk to the parents in our
gateway communities whose children are on preschool
waiting lists. Talk to the students who want a
vocational education, but are locked out from our
state's renowned vocational high schools.
If I could for the moment, I'd like to take a moment
of personal preference and just speak a little bit
about the work that has gone on in your office and
the Speaker's office and all of the information that
these offices and all of our advocates have taken
in.
We've heard all of the arguments that the other side
has tried to tell us why we shouldn't be concerned
about the future of our commonwealth. The Fair Share
Amendment is about the future of our commonwealth.
And so in some instances, I've had the occasion to
speak to Speaker Mariano prior to his becoming a
speaker. And let me tell you, ladies and gentlemen,
when you go to see the Speaker, you better have your
ducks in a row, you better know what's going on in
the piece of legislation that you want to talk to
him about. And the same goes with the Senate
President.
And I know that the advocates on both sides of this
issue have been in to see both of these people and
all of those on their staff. And guess what? They
have looked at this issue from every angle, and
that's why they decided it was important for the
future of this Commonwealth to bring this amendment
forward today.
Massachusetts is known for its world class education
system, yet crumbling buildings, large class sizes,
cuts to essential programs is the reality for
students in many of our districts. I certainly know
it is a reality in my district.
Massachusetts is a hub for innovation, yet 500 of
our bridges are structurally deficient. Our regional
transit authorities face service limitations, the
MBTA struggles with inadequate funding every day.
The Fair Share amendment would create an additional
tax of four percentage points on the portion of a
person's income above $1 million. You've heard all
of the nuances of what this amendment will do. In
the commonwealth, the Fair Share Amendment has been
a topic of discussion for at least eight years in
one form or another, going back to an active
investment in our communities.
The vote we are taking today comes as no surprise if
businesses really wanted to leave. It's not like
we're just pulling this out of a bag last night to
talk about it. We've been talking about it ad
nauseum. If they didn't like it here, they would
have left before now. You're not going to leave a
state that has beautiful beaches, that has strong
educational facilities. I think we can all agree
that Massachusetts is a great place to live.
Also, businesses earning over a million dollars, in
my estimation, are not small businesses. If you're a
small business that has faced difficult times during
the past 15 months, I want you to know that the Fair
Share Amendment is not aimed at challenging you even
more. All of us here today want to help small
businesses and direct recovery funds your way and
this surtax only applies to those earning over $1
million dollars a year.
The last 15 months have shown us how much school
districts and transportation systems would benefit
from additional funding. Achievement gaps in schools
are quickly expanding and traffic has already
returned. While countless people in small businesses
suffered during COVID-19, wealthy executives and
investors saw their income skyrocket. During the
early stages of the pandemic over a million
Massachusetts residents filed for unemployment. Well
18 Massachusetts billionaires saw their wealth grow
by nearly $17 billion.
We saw today in the Boston Globe, a number of
concerns and I will actually call them complaints,
from our business communities about the impact or
potential or alleged impact of this amendment to
businesses. I think that their businesses could not
run in this commonwealth if we did not have roads
and bridges that were safe and secure. How do they
expect businesses to continue if we do not continue
to look forward to the future of our commonwealth.
As a legislature, as a collective body, it is our
responsibility to make these investments and lift
our economy into equitable recovery by addressing
the racial inequalities and racial wealth gap that
hold our state back from its full potential. And
yes, Massachusetts is set to receive significant one
time federal aid from the American Rescue Plan Act,
and other COVID relief bills. However, this one time
federal aid that is set to help us avoid further
cuts to transportation, to public education, to
other public services. And we'll run out in a short
amount of time.
When it does, we need a long-term sustainable source
of revenue to make the investments in transportation
and public education that are needed to sustain full
economic recovery and make Massachusetts an even
better place to live.
The Fair Share Amendment already received over
150,000 signatures from Massachusetts voters. We
advanced the Fair Share Amendment with 147 to 48
vote. A majority of voters support the Fair Share
Amendment in repeated public polling and is backed
by more than 100 community, faith and labor groups
across the commonwealth.
So I stand here today and ask you all once again to
vote in favor of this amendment, so that we can
finally let the Massachusetts voters decide. By
taxing the top 1 percent of households that make $1
million in annual income, we can alleviate the
economic burden on our low income residents, middle
class residents, our most vulnerable residents, and
our future generations. I urge all of you to vote in
favor of this amendment. Thank you.
By a ROLL CALL VOTE of 159-41 at 2:37 p.m., the
House and Senate AGREE to the amendment. The House
voted 121-39 and the Senate 39-2 in favor of the
amendment.
RECESSES: The Constitutional Convention recessed at
2:37 p.m. to meet next on Monday, Oct. 25 at 12 p.m.
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