Passing of Mass' 'Millionaire Tax' Changes State's Flat Tax Rate - The Boston Globe

Passing of Mass’ ‘Millionaire Tax’ Changes State’s Flat Tax Rate – The Boston Globe

Question 1 will amend the state constitution to add 4 percentage points to the 5% state income tax, for annual incomes over $1 million. The union-backed Raise Up Massachusetts coalition, which has been pursuing the measure for the better part of a decade, said the new surtax could raise as much as $2 billion a year, while other estimates point to a transport lower, maybe $1.2 billion, per person. official state projection.

The new surtax would affect approximately 20,000 taxpayers each year.

Fair Share for Massachusetts campaign manager Jeron Mariani called the endorsement “a once-in-a-generation opportunity that took years to prepare.” And the Massachusetts Teachers Association, the main funder of the Question 1 campaign, released a statement celebrating the victory.

“After years of education budget austerity and a Governor’s administration with a diminished vision of what our public schools and colleges can be, the passage of Question 1 gives us cause for deep hope,” said the MTA. Voters embraced Question 1 for what it was: an important step toward creating tax fairness in our state. »

Dan Cence, a spokesman for the business-backed committee that opposed the measure, called the outcome a setback for the Massachusetts economy, as well as small business owners and homeowners, especially those who could be impacted by the single sale of their businesses or homes.

“There is no guarantee that this ill-conceived amendment will increase spending on education or transportation,” Cence said in a statement. “However, it will have a severe impact on retirees, homeowners and hard-working residents across the state. This amendment will hurt small businesses as they battle inflation, supply chain issues and struggle to rebuild from the negative effects of the pandemic.

It was the sixth attempt to persuade voters to overturn the state’s flat tax rate — a decision that can only be made by ballot because it requires a constitutional amendment. In the previous five times, first in 1962 and most recently in 1994, the efforts were resoundingly defeated.

This time around, polls leading up to Election Day generally favored the yes side, which held a narrow lead when votes took place on Tuesday night.

While the vote was close in many communities, there were notable geographic splits in the results.

Communities inside Route 128, for the most part, voted to institute the surtax. In Boston, 65% voted yes; in Cambridge and Somerville, that figure was even higher, with over 70% “yes” votes. In several other major cities, including Springfield and Worcester, Question 1 won by clear majorities. But many Boston-area suburbs and central and southeast cities Massachusetts leaned more toward overturning the measure.

Opponents fear Question 1 will hurt the state’s economic competitiveness, which is already under intense scrutiny due to the high cost of living and doing business here and the widespread acceptance of working at home. distance by many employers. Meanwhile, supporters argued that it would create a fairer tax system and that education and transportation are causes that badly need more support.

The Fair Share Massachusetts committee easily edged out the opposition committee, by a two-to-one ratio, raising more than $27 million in donations this year. Most of this money came from teachers’ unions, namely the Massachusetts Teachers Association and the National Education Association. The business-backed Coalition to Stop the Tax Hike Amendment, meanwhile, raised $14 million this year, mostly from business leaders, particularly in the development and investment sectors. The heavy spending fueled waves of TV ads, with Fair Share spots starting in August and the opposition joining the fray in September.

Dana Gerber can be contacted at Follow her on Twitter @danagerber6. Jon Chesto can be contacted at Follow him on Twitter @jonchesto.

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