Since 2002, tax returns in Massachusetts have featured an option to voluntarily pay a higher 5.85 percent state income tax rate, as opposed to the lower rates required by law.
It’s rare for anyone to actually pay the higher rate. The Massachusetts Department of Revenue told New Boston Post this week that only 1,275 tax filers for 2017 opted to pay the higher rate out of 3,175,892 returns filed – or 4 one-hundredths of 1 percent. Those extra income tax payments provided the state with an additional $279,418 in tax revenue – which is about 1 one-thousandth of 1 percent of the state’s $25.625 billion in revenue during fiscal year 2017.
Warren was not one of those relatively few people to pay at a higher rate until she filed her 2017 tax returns – months before she ran for re-election to the U.S. Senate and around a year before she formally announced she was running for president of the United States.
From 2008 to 2016, Warren paid the standard state income tax rates (which ranged downward from 5.3 percent in 2008 to 5.1 percent in 2016), saving her husband Bruce Mann and her more than $50,000 than they would have paid using the higher rate over the eight years of data available.
On her 2008 return, Warren paid $43,419 in state income tax instead of $47,924. A year later in 2009, she paid $51,345 rather than $56,673. In 2010, it was $49,853 rather than $55,027. In 2011, she paid $31,845 instead of $35,149; and in 2012, the total was $21,690 — not the $24,168 she could have paid.
Warren even continued paying the lower standard rate after she became a U.S. senator.
In 2013, the year after she was first elected, she paid $55,381 as opposed to $61,710. She had her biggest savings in 2014, as she paid $82,998 rather than $93,373. A year later, in 2015, it was $59,875 instead of $68,013. And in her final year of paying the standard state income tax rate (2016), Warren paid $38,043, not $43,637.
The total works out to $51,225 in savings over nine years between the amount she could have paid the state and the amount she actually paid.
Warren has not made her tax returns from 2002 to 2007 public.
Attempts by New Boston Post to reach a spokesman for Warren’s presidential campaign during the past several days have been unsuccessful.
Although during most years Warren chose not to pay more in taxes than she had to, she is a fan of increasing taxes sharply to provide more government services.
Warren’s proposals include a wealth tax on anyone with a net worth exceeding $50 million. It’s a proposal the nonpartisan Penn Wharton Budget Model said would reduce the country’s economic growth by 0.9 percent by 2050. (Warren’s campaign disputes the finding.)
Warren sees a wealth tax as a means of providing what she considers valuable services through government spending.
We need to invest in our future, and the best way to do that is by investing in public education. My #WealthTax gives us enough to pay for #UniversalChildCare, free public college, put a $50 billion investment in our HBCUs, cancel student loan debt, and more. #DemDebate
“Look, there was a time in a very prosperous America — an America that was growing a middle class, an America in which working families were doing better generation after generation after generation — where the top marginal rate was well above 50 percent,” she said in a July 2018 CNBC appearance.
During the CNBC appearance, Warren said a 90 percent top marginal tax rate “sounds pretty shockingly high,” but did not rule out any rates below that.
More recently, Warren has proposed a head tax on companies that employ 60 or more people to help pay for her Medicare-for-All proposal. Vermont U.S. Senator Bernie Sanders, who largely agrees with Warren on economic policy, criticized the proposal as too burdensome on businesses during a podcast interview with The Intercept in November 2019.
“When you’re putting what amounts to a $9,500 ‘head tax’ on a company that is hiring workers for $40 or $50,000, that’s quite a hit. That’s quite a hit,” Sanders said during the November 2019 podcast interview with The Intercept. (The comment starts at 12:21 of the interview.)
For 2017, and apparently for the first time, Warren paid the optional higher state income tax rate of 5.85 percent, giving the state Department of Revenue $55,947. That’s $7,172 more than the 5.1 percent rate she was required to pay, which amounts to $48,775.
For 2018, Warren again paid the optional higher state income tax rate of 5,85 percent, giving the state Department of Revenue $52,330. That’s $6,709 more than the 5.1 percent rate she was required to pay, which amounts to $45,621.
Warren does not appear to have explained publicly why she paid the higher rate for 2017 and 2018 but not in previous years. When Boston Herald columnist Howie Carr contacted her U.S. Senate re-election campaign about it in October 2018, a spokesman responded that Warren “decided to make a charitable contribution to the state of Massachusetts.”
