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Date: 6/15/2021
HAMPSHIRE COUNTY – Local legislators lauded the advancement of a proposed amendment to the state constitution that would increase taxes for the state’s richest residents.
With support from several Western Massachusetts state senators and representatives and the statewide coalition Raise Up Massachusetts, the so-called “Fair Share Amendment” would move the commonwealth away from its current flat tax structure and place an additional surtax on annual household income exceeding $1 million. With a 159-41 vote, a joint session of the House and Senate decided to put the issue on the ballot for the statewide election in 2022.
Termed by some as the “Millionaire’s Tax,” the move would not alter the current 5 percent tax rate for residents making less than $1 million. An additional 4 percent tax would be assessed on the portion of income above $1 million. The $1 million threshold would also be adjusted annually to account for cost-of-living increases.
The tax revenue from this additional surcharge, which they estimate to be as much as $2 billion annually, would be earmarked for public education and infrastructure investments, according to the proposal.
Raise Up Massachusetts – the proposal’s major supporter made up of community organizations, faith-based groups and labor unions – has argued that the state’s wealthiest 1 percent have benefitted from paying state and local taxes on less of their income than any other group while also benefiting from federal tax cuts. Citing the Tax Policy Center’s analysis of the 2017 tax cuts and Jobs Act and the Americans for Tax Fairness’ opposition to the 2020 CARES Act, the group has asserted Massachusetts’ top 1 percent benefitted from 87 percent of the 2017 tax cuts and $135 billion in tax breaks 2020.
“I was proud to vote yes on this legislation that will help yield much needed revenue dedicated to public PreK through higher education as well as our transportation infrastructure. Both critical. Both in need of transformational investment,” Hampshire, Franklin and Worcester state Sen. Jo Comerford said.
Second Hampden and Hampshire District State Sen. John Velis said putting the question to voters was valid and given the state’s fiscal situation following the pandemic, the proposal was part of a necessary exploration of new opportunities to bolster the state economy.
“COVID-19 has decimated so many sectors of our economy and has made so much of our commonwealth’s future uncertain,” he said. “The entire conversation about our state’s finances and revenue sources has changed dramatically in this past year; so much so, that I believe this issue definitely merits being placed in front of the voters so that all of my constituents can have their voices heard. We – as legislators – are not making the final decision here; the voters are.”
First Hampshire District state Rep. Lindsay Sabadosa opined that in addition to increased funding for needed programs, the amendment would address systemic inequities in the state’s tax code and essentially called it a question of morality.
“The Fair Share amendment aims to restore some equity to Massachusetts' tax system. While it does not change our flat tax system, it recognizes that those who make $27,000 and those who make $2 million are paying the exact same rate but the effect on each household’s ability to thrive is disproportionate,” she said. “While the number of individuals who would be subject to this surtax would only be around 20,000, the positive effect of this change would benefit us all. Truly, the question on the ballot is whether we believe in the common good.”
Second Hampshire District state Rep. Daniel Carey said the amendment would allow the state to make investments in improvement projects after federal funding dries up.
“While the state has received financial resources from the federal government recently, those one-time funds will not sustain the necessary improvements we must make to our education and transportation systems,” he said. “Long-term investments in educating our students, enhancing our public transit, and upgrading the infrastructure of our cities and towns will benefit everyone across the Commonwealth for years to come. The passing of this amendment will allow the voters to have the final say on this initiative.”
Berkshire, Hampshire, Franklin and Hampden State Sen. Adam Hinds did not respond to Reminder Publishing’s request for comment, but stated on social media, “Today I am proud to vote yes during a Constitutional Convention to move the Fair Share Amendment to the ballot. We know there are real consequences to the extreme income gaps we are witnessing here in [Massachusetts]. It sets up lower lifelong earnings, education attainment and health outcomes. One of the best remedies is to invest in education. That’s what this measure does, in addition to investments in transportation, both of which will expand opportunity for all who live in our commonwealth.”
Opponents, however, question the proposal’s legal standing as well as its intended impact. The Massachusetts Fiscal Alliance, a non-partisan financial watchdog, criticized the proposal as a politician-led push of an agenda that has already failed in previous votes and deemed unconstitutional by the Massachusetts Supreme Court. Additionally, the 501(c)(4) nonprofit has argued the tax will have an adverse impact on small businesses.
“Only Beacon Hill politicians want to raise taxes by 80 percent, while simultaneously collecting more tax revenue than they know how to spend. The voters should not forget or forgive this level of greed and they will have another chance to hold them accountable in 2022,” said Paul Diego Craney, spokesperson for MassFiscal. “Senate President Karen Spilka and Speaker Ron Mariano have repeatedly been exposed as the country’s most opaque state legislative body and now they are also the greediest. They 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 middle class and working families will be the key constituency that will ultimately reject this proposal. Massachusetts’s middle class and working families have the most to lose under this tax hike proposal. While lawmakers want the public to think it’s a tax hike only for the rich, the state’s most affluent will quickly flee while the middle class and working families will be left to cover the bill. As more middle class and working families realize this is an attempt to tax them next, this will eventually fail for the seventh time and be a victory that all taxpayers can relish.”
While the vote generally followed party lines, not all Western Massachusetts Democrats were on board with Hampden County state Reps. Brian Ashe, Michael Finn and Angelo Puppolo opposing the measure.
“While I understand the intent of today’s proposal, I have concerns about whether the proposal will even survive a constitutional challenge, and I am also concerned about achieving the desired result, when the people we are talking about taxing more have the ability to move states now easier than ever. One example being New Jersey’s whose attempt at a similar tax failed to live up to expectations,” Finn said.
December 2020 research conducted by the Mass Inc. Polling Group indicated 72 percent of 1,522 Massachusetts registered voters polled supported the surtax and the firm noted they have “surveyed this issue on many occasions and found consistently broad support.” However, the same poll also noted that more than half of respondents (55 percent) feel the commonwealth’s taxes are higher than other states while 64 percent believe it is “very important” that state decision makers make the best use of existing resources before resorting to tax increases.