Mass. lawmakers advance millionaires tax
Courtesy House Broadcasting
Representatives and Senators gathered in the House chamber Wednesday for a join session to debate a proposed constitutional amendment that would impose a surtax on incomes that exceed $1 million.
Citing the need for new tax revenues and more fairness in tax policy, Massachusetts lawmakers voted 135-57 Wednesday to advance a constitutional amendment designed to generate $1.9 billion for education and transportation by assessing a new 4 percent surtax on households with incomes above $1 million.
Before recessing their Constitutional Convention until July 13, senators voted 33-7 in favor of the amendment, with House members voting 102-50. Only 50 votes were needed to advance the proposal.
Sen. Jason Lewis said the tax change would assist lower income households who he said are paying a higher share of income in taxes. Lewis contrasted the state's "shameful" rising child poverty rate with the disproportionate share of new income and wealth that has flowed to people who are "already very rich."
"The tax structure that we have is not sufficient to support the needs of the commonwealth," said Lewis, a Winchester Democrat who asserted that years of rising health care costs have snuffed out inflation-adjusted investments in transportation, education, public health and mental health programs.
In addition to being skeptical about whether the new revenues would actually be spent for the intended purposes, amendment opponents -- mostly Republicans -- said the surtax would drive increasingly-mobile job creators out of Massachusetts and lead to a system with varied tax brackets.
"It is the introduction of class warfare," said Rep. David Nangle (D-Lowell). He added, "It is stealing from the rich to give to the poor." He called it a "dereliction of duty" to foist the duties of lawmakers -- making decisions about taxation and spending -- to the ballot process.
Massachusetts currently has a flat 5.1 percent income tax rate. If the amendment receives at least 50 votes from lawmakers meeting in another Constitutional Convention during the 2017-2018 session, the proposal would be placed before voters in November 2018 for a binding vote.
Voting 42-147, lawmakers rejected a proposal from Republicans to lock in a 5 percent tax rate on incomes of less than $1 million. House Minority Leader Brad Jones called the amendment "the best of both worlds for some here" because it preserved the millionaire's tax proposal but added language to ensure a stable tax rate on those earning less than $1 million.
While it attracted some votes from Democrats, an amendment aimed at guaranteeing that the $1.9 billion expected from the millionaire's tax be added to existing spending on transportation and education failed 54-138.
Predicting that new revenue from a tax on millionaires would supplant, rather than supplement, existing spending on transportation and education, Jones said the amendment would have codified the intentions of the petitioners.
"Guess, what? You can't trust us, and the track record of the Legislature proves that point," Jones said.
Jones also offered an amendment that would have struck out the language of the citizen's petition and replaced it with a flat income tax rate of 5 percent for all taxpayers. It failed on a 42-148 vote.
"We propose that because that is what the voters of the commonwealth voted to do 16 years ago this November," Jones said, referencing the successful 2000 ballot question to reduce the state personal income tax rate in steps over three years to 5 percent. "Let's start this debate by honoring the will of the voters, the clear and vast majority of which said they wanted a 5 percent income tax rate."
The constitutional amendment, proposed by the Raise Up Coalition which gathered 157,000 voter signatures to back up their proposal, changes a 1917 provision that requires a uniform tax rate for all citizens.
Rep. Jay Kaufman, who introduced the proposal, described the current tax system as "regressive" with higher-income earners paying a lower effective tax rate than low-income families. Kaufman, of Lexington, said the state's transportation and public education systems are chronically underfunded, holding back the state's economic growth.
"We have an unsustainable tax system. We are not able to raise the revenue needed to provide fundamental services for the citizens of our cities and towns," Kaufman said.
Senate Minority Leader Bruce Tarr questioned the constitutionality of the directive that new tax revenues be spent on education and transportation, and recommended seeking an opinion from the Supreme Judicial Court. Attorney General Maura Healey has certified that the question does not violate a constitutional provision preventing ballot questions from restricting the Legislature's authority to appropriate tax dollars.
Calling the measure a "success penalty," Tarr also expressed concern that millionaires would leave the state, hurting economic growth.
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