When a Tennessee couple claimed a big chunk of the biggest Powerball ever -- 1.5 billion dollars-- I wasn’t jealous. Well, maybe a little bit. Secretly, I counted on taking home one of the secondary place million dollar prizes. No such luck. But, two people in Massachusetts did win, becoming instant millionaires. No doubt they are somewhere lounging in the sun.
Or maybe not. A million doesn’t go as far as it once did. And it definitely won’t if the so called millionaire’s tax gets the voters' okay. Already, the campaign for a surtax on million-dollar earners is picking up steam, led by the advocacy group Raise Up Massachusetts. What once seemed like tilting at windmills is now a real possibility—pushed forward by the legislature’s revenue committee. Last month the committee approved the proposed constitutional amendment, which would require millionaires to pay over and above their annual income tax.
The surcharge would tack on an extra 4 percent tax on the first million earned with automatic hikes upward on the second million and beyond. The state would reap between $1.4 billion and perhaps as high as $2.2 billion in extra revenue. Monies to be directed toward fixing the state’s burgeoning education and transportation ills.
Both areas are in desperate need because of the kicking the can down the road far too many times. I remember back in 2013, when former Governor Deval Patrick suggested a tax every resident would have to pay. His tax would have raised $1.9 billion in new revenue to fund—wait for it—education and transportation. Lawmakers met his proposal with a glacial chill, one calling it, “reckless and irresponsible.” I said then that it didn’t make sense not to raise funds toward future education and transportation projects. And now here we are, scrambling for available cash from the only people who seem to have more than they need.
Raise Up Massachusetts calls the surcharge the “fair share amendment” because the state’s highest earners have made more in recent years, but paid less in state and local taxes. According to MassBudget-- 6.5 percent on average for wealthy residents, versus the average 9.4 percent for all others. In a letter to the legislature, 71 economists from Massachusetts universities confirmed the income gap. A gap Representative Jay Kaufman—the co chair of the revenue committee—points out makes Massachusetts, “number one in our inequality, not a distinction we want or need.”
I want the deep pocketed to pay their fair share, but frankly I don’t think they will be motivated by a moral imperative. But, I also understand the concern of Senator Ryan Fattman, who worries a millionaire’s tax will drive business away -- cementing the state’s reputation as Taxachusetts.
The state’s two newest millionaires don’t have to worry yet about coughing up more of their windfall. There is a long way to go before a vote for the surcharge ends up on the 2018 ballot. No doubt the surcharge campaign will face an intense push back from people with a million dollar annual income. It’s pretty certain those of us in the ever shrinking middle class won’t offer much objection. Selfishly, I’m just glad that this time around we aren’t the ones getting squeezed.