Massachusetts Ballot Question 1 seeks to impose extra taxes on the wealthiest residents of the state to funnel extra money into education and transportation, but could harm small business owners or retirees, according to experts from both sides of the issue who debated the question on Greater Boston.
Those who support the measure call it the "fair share amendment," while those who oppose it call it the "millionaires' tax" or the "tax hike amendment."
What would Question 1 do?
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Massachusetts differs from many states in that it currently has a flat tax system and taxes all income levels at the same rate: 5%. Voters have rejected attempts to implement a graduated income tax in the past.
Question 1 would change the state constitution and create a 4% additional tax on all income earned above $1 million. If someone earns $1 million or less, they would not be subject to the additional tax. If they earn $2 million, they are taxed only on the second million in earnings.
The money from the tax increase would be used for education and transportation costs, subject to appropriation by the state legislature.
Voting "yes" on the ballot question means supporting the change to the constitution that would impose a 4% tax hike on incomes over $1 million. Voting "no" on the ballot question means you oppose the 4% tax increase and want things to stay the same as they are now.
A study from Tufts University's Center for State Policy Analysis said that the change would generate about $1.3 billion of revenue in 2023 and would apply to about 0.6% of households in the state.
What are the arguments for and against the tax increase?
Steve Crawford of Fair Share Massachusetts wants people to vote yes. "It will make our tax system fairer and it will provide more money for transportation and education," he said on Greater Boston. "Right now, the wealthiest people in the state pay a smaller share in taxes than the rest of us. That's just not fair."
Proponents of the tax increase have pointed to the economic fallout from the pandemic for why the amendment is important now.
On the opposing side, Dan Cence of the Coalition to Stop the Tax Hike Amendment said there's no guarantee that the legislature will appropriate the money for education and transportation. Crawford pushed back and said taxpayers would hold them accountable to their promise.
Cence said people who sell their small business, farm or home to create a nest egg would be negatively impacted by the tax hike. "This is much more of a middle class tax than it is for the uber wealthy," he said.
Crawford, providing a counterargument, said very few people make more than $1 million in profit on their home or business.
The Tufts study found the tax was “likely to advance racial and economic equity” through revenue for education and transportation, but could also likely have behavioral impacts, with a small number of high-earners relocating to other states.
The Massachusetts general election is on Tuesday, Nov. 8.
Debate: Question 1 would increase tax on high-income earners in Massachusetts