Backers Of Proposed Tax Hike On Massachusetts Millionaires File Signatures

Dec 2, 2015

Credit wikipedia.org

Activists pushing for a so-called “millionaires’ tax” in Massachusetts say their campaign has had a successful start. They’ve collected more than enough signatures to advance the proposal toward the ballot, and have an endorsement from a powerful political ally.

The group Raise Up Massachusetts said it delivered over 157,000 signatures – more than double the number required – to the Secretary of State’s office by Tuesday’s deadline to advance a proposed constitutional amendment putting an additional tax on annual income above $1 million.

The campaign got a further boost by way of an endorsement from State Senate President Stan Rosenberg of Amherst.

" I am very much in favor of the proposal," Rosenberg said.  " It would change the constitution to say that anyone who has over $1 million in taxable income would pay an additional 4 percent tax."

The coalition behind the campaign includes labor unions, community organizers, faith leaders and advocates for spending more on transportation and education, which is where the additional tax revenue would be earmarked. 

The Raise Up group successfully collected signatures in 2013 and 2014 on behalf of ballot initiatives to increase the minimum wage and to guarantee sick time for all Massachusetts workers. But amending the state constitution to change the tax system is a long process.

" It requires a vote of 50 members of the legislature in this term to advance to the Constitutional Convention in the next term and then 50 votes again would put it on the ballot," Rosenberg explained.

Rosenberg will preside at the Constitutional Convention on February 3, 2016 where the first vote on the millionaires’ tax amendment proposal could take place.        

Massachusetts voters, in the past, have soundly rejected attempts to change the state constitution to permit a graduated income tax, but Rosenberg believes the outcome could be different if this proposed amendment makes it to the 2018 ballot.

"In the past, constitutional amendments have been very differently constructed. This one because it is focused specifically on money for education and transportation will stand a better chance of being approved. And, also because it is very clear that  it ( affects) people who make more than $1 million in taxable income."

An analysis by the Massachusetts Department of Revenue said the proposed tax increase could generate between $1.6 billion and $2.2 billion a year.  Also, the DOR said fewer than 20,000 taxpayers, which is less than 1 percent of all filers, would be affected by the change.

Critics of the proposed constitutional amendment, including Citizens for Limited Taxation, claim people earning more than $1 million a year will be motivated to move to New Hampshire, which has no income tax.  

The state’s finances have been under fire recently from Wall Street bond rating agencies and a Beacon Hill watchdog group, the Massachusetts Taxpayers Foundation, which flagged the state’s high level of debt, unfunded pension liabilities, and the use of cash reserves to cover budget gaps.

Lt. Gov. Karyn Polito said the Baker Administration intends to address these concerns.

" This is a multi-year fix," said Polito. " It is going to take  a few years to make sure we don't continue to spend beyond the growth of our revenues and bring fiscal discipline to the ( budget) process."

The state’s rainy day fund has a current balance of $1.25 billion, down from $2.3 billion just before the Great Recession.