‘Millionaire tax’ to see its first vote

Printed from: https://newbostonpost.com/2016/05/16/millionaire-tax-to-see-its-first-vote/

BOSTON (AP) — A plan for taxing the wealthiest Massachusetts residents could get its first nudge forward in the coming week when the Legislature, meeting in a joint constitutional convention, is expected to take up what has become known as the “millionaire tax.”

The proposed constitutional amendment needs the backing of only 50 of the combined 200 lawmakers in the House and Senate to advance Wednesday. Senate President Stan Rosenberg, who supports the tax, told reporters this past week he expects to “comfortably” exceed that threshold.

The measure would impose a surtax of 4 percent on any portion of annual income that exceeds $1 million. The additional revenue generated by the tax would be earmarked for education and transportation purposes only. The tax would be on top of the current 5.1 percent tax paid by all wage-earners in Massachusetts.

A constitutional amendment is needed because the state’s constitution stipulates a uniform or “flat” tax rate for all residents. The federal government and all but eight of the 41 U.S. states that tax wages have graduated rates, meaning that higher earners pay a greater percentage of their income in taxes.

Rosenberg is among a cadre of liberal Senate Democrats who argue that the state must find ways to generate more tax revenue to pay for critical public needs.

It is not a view shared by Republican Gov. Charlie Baker or Democratic leaders in the House. And because the constitution also requires that any tax legislation originate in the House, the Senate’s hands are often tied when it comes to taxes in the annual state budget.

Republicans pounced on Rosenberg, an Amherst Democrat, when he said during a recent WGBH-FM interview that the Senate was “ever at the ready” to consider taxes.

“Senate President Rosenberg’s admission that he’s vigilantly looking for new ways to hike taxes reveals what we all knew: Beacon Hill Democrats just view working families as a constant source of more revenue for their spending sprees,” said Kirsten Hughes, chairwoman of the Massachusetts GOP, in a statement.

Rosenberg said he stood by his remarks, adding that his primary interest was in making the tax system fairer and more progressive. He also rebutted claims by Baker and others that the state’s fiscal woes are purely the result of overspending.

“I thought it was time for someone to say it’s not just a spending problem,” he said. “There is a spending problem but there is also a revenue problem and I stand by that.”

If the millionaire tax gets at least 50 votes Thursday, and again in a constitutional convention during the 2017-2018 legislative session, it would go before voters for ratification in November 2018.

Massachusetts voters have rejected previous attempts to institute graduated income tax rates, most recently in 1994.

Along with Republicans, the millionaire tax is opposed by several business groups that call it anticompetitive.

In a letter to lawmakers, the Massachusetts High Technology Council said if the constitutional amendment was approved Massachusetts would have one of the nation’s highest top tax rates for individuals. The council argued that higher tax rates on wealthier individuals have served to stifle investment and job growth in other states.