The Berkshire Eagle
Oct 21, 2022
Ballot Question 1 asks voters to approve an amendment to the Massachusetts Constitution that would establish an additional four percent state income tax on the portion of annual taxable income above $1 million. A yes vote would amend the constitution to impose the additional tax, while a no vote would make no change to the state constitution.
The so-called Fair Share Amendment is projected to bring more than $1 billion in additional tax revenue into state coffers without raising taxes on anyone earning under $1 million in annual taxable income. The additional money brought in by this surtax ostensibly would be earmarked for education and transportation — two areas where rural communities like ours see the need for serious reinvestment.
It’s a pitch that’s tough to argue with. This measure would generate considerable new revenue simply by asking an exceptionally small percentage of exceptionally wealthy individuals to chip in another four cents on every dollar earned above $1 million. Estimates from the most recently available tax-filing data show this would fall on only about 20,000 individuals among the commonwealth’s 7 million residents— or less than 1 percent of taxpayers. In asking those most able to pay more, the state would generate sizable new funding streams for renewed public investment while shifting our regressive flat state income tax into a more progressive and fair model.
We’re in favor of the Fair Share Amendment, even as we believe it’s far from the silver-bullet measure its proponents tout it to be. In our opinion, it would be far better to adopt a truly progressive state income tax with more brackets and finely tuned marginal rates, as opposed to a two-tiered structure based on the marketability of a term like “the millionaire’s tax.” Given the social will and political capital expended on getting this measure on the ballot, it likely means that hopes of a serious discussion on a more appropriately honed progressive income tax structure will be delayed if not dashed. And while we don’t think this rather modest tax increase on those most able to pay will resort in a mass exodus from the Bay State, its proponents’ convictions that it won’t cause any wealthy residents’ exit are specious at best.
On a procedural note, while the language of the amendment calls for the additional generated revenue to be spent on education or transportation, it would still be subject to appropriation by the Legislature. This makes the oversimplified notion that this additional $1 billion-plus in revenue will automatically flow into transportation and education funding somewhat misleading. If it does pass, it will be up to all of us to hold our lawmakers accountable to the spirit of this measure and apply the necessary political pressure to ensure this money goes where it’s intended.
Of course, the opponents to the question have much more full-throated critiques. Chief among them is the charge that this new tax will result in hardship for certain residents who are far from millionaires, such as small business owners, seniors selling their homes or farmers selling their land. It’s true that income from selling a house or from certain business structures counts as personal taxable income, those netting more than $1 million from annual business income or a home sale would still make up a tiny minority of Mass. residents, and are arguably well-equipped to pay a few cents more on the dollar over the first million made. It’s also worth noting that there is a sizable tax credit for sale of a domicile — $250,000 for single filers, $500,000 for married filers — which means that those selling their primary homes would not even hit the threshold for this new tax unless the sale generates well over $1 million.
The Fair Share Amendment’s opponents know that this tax will ultimately impact very, very few people in the commonwealth, so their suggestion that the average small-business owner or senior on a fixed income would get hit by this measure amounts to scare-mongering. So, too, does their disingenuous talking point that the Fair Share Amendment represents an “80 percent tax hike,” which they know plays fast and loose with the facts on how marginal rates work. Even the relatively few whose high income would trigger this new surtax would not see an 80 percent increase in their total tax bill, as only taxable income above the first million would see an extra four-cent surtax. Where the opposition does have a point is the potential vulnerability of farmers who might sell all or some of their land in retirement or to make ends meet. That singular point should not torpedo the Fair Share Amendment, but it should behoove the Legislature to act swiftly in creating a tax break protecting farmers who might see a onetime hit from the measure if it passes.
And based on the available polling data, it’s looking likely that this measure will pass. If it does, this will be serious step toward making the state tax system more equitable in a way that only impacts a very while generating revenue for public investment that our communities desperately need. That’s an opportunity Massachusetts voters shouldn’t pass up. The Eagle endorses a yes vote on Question 1.