The South Shore Chamber of Commerce opposes Question 1 on the November Ballot. The proposed constitutional amendment imposes an additional 4% tax on any income over $1 million. Any future change or repeal will require another constitutional amendment – a process that can run from 30 months to many years. The chamber is concerned about how this may discourage people from moving here or opening a business in Massachusetts. The state already sees some of its wealthier residents leaving for states with more favorable taxes. An 80% increase in taxes (from 5% to 9%) on income over $1 million will not help. The need to permanently raise $1-2 billion dollars in new taxes is not compelling when we have record high state tax revenues.
The November ballot includes a proposed State Constitutional Amendment to tax individuals an additional 4%, above the current 5% tax, on all income over $1 million. ( 5% up to $1 million and 9% on every dollar after that.) This includes all income sources, not just salaries. It is often referred to as “the millionaires’ tax”, “fair share tax” and graduated income tax. The language suggests that the money raised will be used only for education and transportation. There is a cost-of living index applied to the $1 million so that the tax applies to slightly higher income levels than $1 million in the future.
The South Shore Chamber of Commerce opposes the ballot question.
This new tax would push the state closer to the class of states considered high tax states –company we do not want to keep. It risks accelerated wealth flight - wealthier individuals moving out of high tax states to lower tax states. Evidence indicates that wealth flight is already occurring in Massachusetts, partly because of the state’s highly unfavorable estate tax (the tax when a person dies). That exodus is potentially accelerating because of the new-found acceptance of remote work. It may also discourage younger people from starting businesses here. They may not be high earners but hope to be or to build successful businesses choosing to avoid high tax states.
If entrepreneurs leave the state or are discouraged from coming here, that will hurt overall economic activity and job creation. Wealth flight also harms our non-profits, one of the largest sources of employment in the state. Their missions and services are an important part of the region’s quality of life. Most of these organizations depend on the generosity of a relatively small number of wealthy people for a large part of their annual charitable giving. A loss of donor/local philanthropists will reduce support for our non-profit’s missions and the related jobs.
Th Chamber is not persuaded by proponents on the need for this large tax increase. They argue:
For more information on both sides of the proposal please see
https://noquestion1.com/ (opponent’s coalition group)
https://www.fairsharema.com (supporter’s coalition group)
The Proposed Amendment to the State Constitution
To provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes. In addition to the taxes on income otherwise authorized under this Article, there shall be an additional tax of 4 percent on that portion of annual taxable income in excess of $1,000,000 (one million dollars) reported on any return related to those taxes. To ensure that this additional tax continues to apply only to the commonwealth’s highest income taxpayers, this $1,000,000 (one million dollars) income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets. This paragraph shall apply to all tax years beginning on or after January 1, 2023.