Boston’s City Council approved a non-binding resolution supporting the “Fair Share” amendment — a proposed change to the Massachusetts constitution that would create what's popularly called a millionaire's tax.
All three of the councilors vying for the mayor’s seat — Michelle Wu, Andrea Campbell and Annissa Essaibi George — voted in favor of the measure, which would levy a four percent surtax on annual incomes above $1 million.
At-Large Councilor Michael Flaherty was the lone “no” vote. Dorchester Councilor Frank Baker was not present for Wednesday’s meeting.
If the amendment passes a second consecutive vote by the legislature, as political observers expect, and is then approved by voters as a ballot question, it would impact a couple of thousand Bostonians who fall into its target tax bracket.
Councilor Lydia Edwards sponsored the council’s action.
“It may not be much to some people, but that’s how we [the council] speak,” she said of the resolution.
According to the latest data on the state revenue department website, about 18,000 filers reported income in excess of $1 million across the state in 2017.
In Boston, about 2,500 filers fell into that bracket and paid an average of $240,000 in taxes.
Edwards said the tax would be a “small price” for millionaires to pay in exchange for the billions of dollars it will raise to help fund public education and transportation infrastructure upgrades.
“It would be a massive return on your investment if you are willing to put the money in to help fellow men and women in the Commonwealth. Maybe they too can become millionaires, who knows,” she said.
It is estimated that the tax would bring in an annual of $2 billion for Massachusetts. The income level threshold, the amendment proposal says, would be adjusted each year via the same method for federal income tax brackets to account for cost-of-living increases.
Opponents argue the surtax would trigger an exodus of high-income residents and businesses and discourage others from coming to Massachusetts.
Flaherty told GBH News his “no” vote is not an indication he is "broadly opposed" to the amendment, but that he desires to understand it further.
“I’m interested in learning more about what impact this may have on small business owners and long-term residents who may be relying on the one-time sale of property or business as their retirement nest egg,” he explained in a message to GBH News on Wednesday evening.
A recent report from the conservative-leaning Pioneer Institute found that if the state’s income growth trends continue, the proposed tax would cause “many non-millionaires to be subject to the surtax over time,” since the federal formula used to calculate cost of living increases does not keep pace with Massachusetts’ historical rates of salary, wage and household income increase.
“I do not want to inadvertently cause harm to businesses that may be struggling as a result of COVID-19 or subject a resident who is selling a property that has gained enormous value over years to additional taxes,” Flaherty said.
The resolution now goes to the legislature, which is expected to take up the amendment over the course of the current session.
