‘Millionaire tax’ vote put off to at least May

Printed from: https://newbostonpost.com/2016/04/06/millionaire-tax-vote-put-off-to-at-least-may/

BOSTON — A vote on a surtax aimed at people who earn $1 million or more won’t occur until May 18 at the earliest, after Beacon Hill lawmakers recessed a Constitutional Convention without taking up the measure Wednesday.

The tax increase, in the form of a ballot proposal to amend the state constitution (H 3933), would add a 4 percent surtax on incomes over $1 million. The state revenue department has estimated the tax could add almost $2 billion to the government’s coffers, a figure disputed by other analysts.

According to the state estimate, roughly 19,500 filers, representing half of 1 percent of all tax returns, would pay the tax, which would be added to the current 5.1 percent flat rate. Eighty-six percent of affected taxpayers would be married couples filing jointly, and 11 percent would be individual filers, according to the state’s estimates.

Amendment supporters say the proposal will address income inequality and generate $1.9 billion in new tax revenue. While backers say that money would only be used for schools and transportation needs, opponents say it would go into the state’s general fund, which can be used for any purpose, as tax revenue can’t be earmarked for specific uses.

Supporters have expressed confidence that they have the necessary 50 votes to advance the proposal to the 2017-2018 General Court, as needed to push it forward. Should the proposal meet all the requirements, the earliest it could appear on the ballot would be November 2018.

Backers of the measure, the same coalition that won passage of an earned sick-time measure that largely affected low-wage workers, last year gathered 92,617 certified signatures around the state to advance the tax proposal to the convention.

After breezing through the five items on the joint calendar preceding the tax proposal, Wednesday’s Constitutional Convention recessed until May 18 at 1 p.m. That effectively delayed a tax vote until after the May 3 deadline for major party candidates to submit nomination papers for state office this year.

With the so-called millionaire’s tax up next on the convention calendar, Senate President Stanley Rosenberg, ab Amherst Democrat, recognized Senate Majority Leader Harriette Chandler, a Democrat from Worcester, who made the motion to postpone the convention until May 18. There was no debate on the motion and it passed on a voice vote.

Two days ago, Rosenberg voiced clear support for the millionaire tax and said many of the Senate’s working group members are pointing to a need for more revenue. In comments Monday to a gathering of union leaders, Rosenberg provided a glimpse of the strategy backers plan to use to build support for the measure against a backdrop of consistent failure to convince voters to raise taxes at the ballot box.

It appears lawmakers may tackle the amendment on May 18. It will be the first item on the agenda that day and the House on Wednesday adopted an order stating that the amendment will be the only matter considered at the May 18 convention. The action also stipulated that amendments must be filed by 5 p.m. on May 12. The amendments will be filed with the Senate clerk, who is the clerk during joint conventions.

In addition to discouraging high-income earners from living in Massachusetts, and undermining entrepreneurs looking to build new businesses here, opponents say it will tie the hands of future lawmakers by enshrining tax policy in the constitution, which is difficult and time-consuming to amend. Critics also say the move may open the door to a broader graduated income tax structure in which higher earners are taxed at higher rates and lower earners at lower rates.

According to the Massachusetts High Tech Council, which is made up of tech companies, higher education institutions, law firms and other businesses, establishment of the higher tax bracket would place Massachusetts below only California and Minnesota as one of the highest top-tax rates among “peer technology” states. The council has also warned that General Electric — whose move from Connecticut to Boston was touted by the mayor, the governor and the House speaker in their annual speeches this year — was related to “anti-competitive state tax policies” in Connecticut.

Speaking before a crowd of business and government officials in Boston on Monday, General Electric CEO Jeff Immelt said Boston’s “ecosystem” of ideas and entrepreneurs drove the company to move its headquarters here from Connecticut and said he was unconcerned about added taxes on big earners.

Immelt said the fate of the nearly $2 billion tax proposal would not have a bearing on whether he or other GE executives live in the Bay State.

“None of us earn that, no,” Immelt joked, before professing a lack of concern about a tax question that opponents say would drive high earners from the state and drive up costs for small businesses. He said, “I think whatever happens happens, and will impact us just like it impacts everybody else. Really, I think, believe it or not, most days what we think about is how we can sell more jet engines and gas turbines and we let the rest of the chips fall where they may.”

Gov. Charlie Baker, a Republican who has taken a firm stance as a candidate and as governor against new or higher taxes, has not staked out a position for or against the surtax amendment.

On a March 8 appearance on WGBH’s “Greater Boston,” Speaker Robert DeLeo, the leader of the House of Representatives, told host Jim Braude that he planned to vote in favor of the amendment.

“I will be, I believe. I think right now I’ve spoken to some of the folks who want to sit down and talk to me about the issue but I’m expecting that it will go to our vote in the Constitutional Convention and quite frankly just needing 50 votes, I’m pretty confident it will get the 50 votes,” DeLeo, a Lynn Democrat, said.