The 'Millionaires' Tax' Jumps Its First Hurdle On Its Way To Voters

Proponents of a so-called millionaires' tax won a major victory at the State House Wednesday. In a nearly three-hour Constitutional Convention—a joint session of the House and Senate that vets proposed amendments to the Massachusetts Constitution—the proposed measure received 135 votes, more than enough to move to the next stage of the amendment process.

If a proposed constitutional amendment receives the backing of at least 50 of the state’s 200 legislators in two consecutive years, the measure is then placed before the general public for a vote. If the millionaires' tax is approved at a Constitutional Convention next year, voters will have the final say in 2018.

Right now, all Massachusetts voters pay an identical income-tax rate of 5.1 percent. If passed, the proposed amendment would place an additional tax of 4 percent on all income over $1 million—to “provide the resources for quality public education…affordable public colleges and universities, and…the repair and maintenance of roads, bridges and public transportation.”

The new tax would raise about $2 billion annually.

Before the vote was cast, Rep. Jay Kaufman of Lexington, the co-chair of the Legislature's Joint Committee on Revenue, spoke in favor of the proposed amendment.

“We can’t get to work without broken axles on the roads that are in bad repair,” Kaufman said. “We can’t avoid bridges that are in jeopardy of collapsing, and we can’t get the [MBTA] and other public transportation modes to run on time and safely. That’s a serious problem for all of us as citizens, and it’s a serious problem for our economy.”

“We do not have universal pre-K education in the Commonwealth,” he added. “We do not have a public higher-education system that allows our citizens to graduate without enormously burdensome debt.”

There was sharp pushback from several Republican legislators, however. Sen. Bruce Tarr of Gloucester, the Senate minority leader, said voters have previously rejected attempts to alter the Massachusetts Constitution to implement a graduated income tax—and warned that if the millionaire’s tax becomes a reality, the state’s most affluent residents will simply find ways to avoid it.

“[We’ve] isolated a select group of taxpayers who happen to be among the most mobile in the Commonwealth, in terms of their ability to move capital, to move their residence, and to avoid taxation altogether,” Tarr said.

Rep. Brad Jones of North Reading, the House minority leader, offered two proposals of his own in lieu of the millionaire’s tax. One would have set the state’s income-tax rate at a flat 5 percent—a shift that was backed by voters in 2000, but which the Legislature never fully implemented. Another would have dropped the income-tax rate to 5 percent, while also allowing an extra 4 percent tax on income over $1 million.

Neither received sufficient votes to pass.

Jones also proposed imposing an iron-clad requirement that any revenue raised by a millionaire’s tax be spent on education and transportation, and not diverted to other purposes. Such a provision, he said, would convince skeptics that the millionaire’s tax isn’t a “Trojan tax horse” aimed at creating a graduated income-tax system.

That proposal failed as well.

Throughout the Constitutional Convention, legislators speaking in favor and in opposition of the millionaires' tax struggled to be heard over the din created by their colleagues, many of whom engaged in loud conversation throughout the event. Senate President Stan Rosenberg, who presided over the event, repeatedly asked for quiet, but any effect his entreaties had was short lived.

After the Constitutional Convention adjourned, Kaufman told WGBH News that he was gratified by the proposed amendment's emphatic margin of passage.

"I was surprised, but not very surprised," he said. "By the time debate began today, I was cautiously optimistic that we would get two-thirds' vote, which was much higher than I would have guessed a few months ago ... Getting to 70 percent surprises me and pleases me to no end."