The so-called Millionaires' Tax moved a step closer to becoming a reality Wednesday, as the Massachusetts Legislature voted 159 to 41 to put a proposed four-percent surtax on incomes over a million dollars before voters in 2022.
Because the Massachusetts Constitution mandates one uniform income-tax rate, the change — also known as the "Fair Share Amendment" — would require a constitutional amendment. Wednesday's vote marked the second consecutive year that the Legislature, in its annual Constitutional Convention, has voted to advance the proposal. If voters agree next year, the new surtax would take effect in 2023.
Supporters of the amendment say it would give the state nearly $2 billion in new revenues annually, creating a crucial new funding stream for public education and transportation.
Opponents, however, contend the proposed change would kill jobs and prompt wealthy residents to leave Massachusetts, and claim the potential financial gains have been overstated.
On Tuesday, the Fiscal Alliance Foundation and Beacon Hill Institute released a study which put the projected revenue increase at just $1.2 billion, and estimated that 9000 jobs would be lost.
"This debate is being fueled by lawmakers acting on their worst urges and impulses to spend more money they don't have," said Paul Craney, a spokesman for the Fiscal Alliance Foundation.
Proponents, however, said the amendment would enable Massachusetts to meet crucial needs that are currently being neglected, while also make Massachusetts more economically fair.
"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," State Sen. Jason Lewis (D-Winchester), the amendment's Senate cosponsor, said during Wednesday's debate.
"Since 1979, average income for the top one percent has grown at an annual rate that is ten times greater than the growth of average income for the bottom 90 percent," Lewis added. "Income and wealth inequality have now reached levels not seen since the 1920s, right before the Great Depression. And we have to face the fact that our state, Massachusetts, is one of the most unequal in the nation."
The proposed amendment, which will come before voters in a gubernatorial election year, is likely to be met by extremely intense advocacy on both sides.
It began immediately after the vote, when Craney, the Fiscal Alliance Foundation spokesman, released a statement warning of dire consequences if the measure becomes law.
“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,” Craney said. As more middle class and working families realize this is an attempt to tax them next, this will eventually fail … and be a victory that all taxpayers can relish.”
The group Rise Up Massachusetts, which backs the measure, noted in a statement that the campaign to pass the measure is “already in full swing, with more than a dozen local rallies happening across the state this month.”