Committee approves millionaires tax
Would impose 4% surtax on income over $1m
STATE HOUSE NEWS SERVICE
THE LEGISLATURE’S COMMITTEE ON REVENUE on Thursday morning gave its stamp of approval to a proposed constitutional amendment that would establish a 4 percent surtax on income in excess of $1 million in a bid to raise $1.9 billion.
The proposal (H 3933) seeks to raise additional revenue for education and transportation initiatives by hiking the tax rate for earnings in excess of $1 million to about 9 percent.
Revenue Committee Chair Rep. Jay Kaufman on Thursday praised the Raise Up coalition, who spearheaded the effort for the constitutional amendment, in remarks following a favorable vote on the measure.
Without debate on the matter, the committee voted 12-4 to recommend that the bill ought to pass.Rep. Walter Timilty, a Milton Democrat, joined Republicans Sen. Ryan Fattman, Rep. Randy Hunt and Rep. Shawn Dooley in voting to recommend that the bill should not pass.
[Watch: Revenue Committee Vote]Supporters pressed lawmakers last week to advance the proposal, arguing that the “fair share amendment” would allow the state to put money into transportation projects and education without hitting the middle class with a tax hike.
Raise Up Massachusetts, the group behind the proposed amendment, has estimated the surtax would affect 14,000 individuals, generating between $1.3 billion and $1.4 billion in additional revenue, while the Department of Revenue estimated a higher yield of $1.6 billion to $2.2 billion with $1.9 billion as the median.
Opponents argued that the amendment would have serious consequences that are
not being considered by proponents, like the possible outward migration of Bay State millionaires and the impact on the state budget of the associated decline in capital gains taxes.“On principle, one thing I believe is that you don’t raise people up by tearing others down,” Fattman, who said he would be drafting the minority report, said after the committee vote. “An income tax the way it is is a fair tax and everyone pays the same thing, so in principle, when we talk about fairness, I think that’s fair.”
Fattman also said that if the amendment were to become law, it could dissuade corporations from choosing to base themselves in Massachusetts.“We just attracted GE to come here and I don’t think it makes sense to give anybody any questions about where we’re going as a state with the business climate. We want to make sure that we continue to attract people,” he said.
Rep. Jay Kaufman, co-chair of the Revenue Committee, praised the work of the Raise Up Massachusetts coalition in gathering the signatures necessary to get the proposal before the Legislature and said that he expects the question to go to voters on Nov. 6, 2018 — 1,013 days from now.
“This proposal come to us at the intersection of two huge challenges, the challenge first to find the financial wherewithal to meet the needs of Massachusetts families and have the education and transportation that are a vital part of a vibrant economy,” he said. “And second the challenge to address the gross wealth and income inequality in the state. We are number one in the nation in our inequality, not a distinction we want or need.”
If the proposal is advanced by House and Senate members meeting jointly in Constitutional Conventions this session and in the 2017-2018 session, the question could go to voters in November 2018.
The next meeting of the Constitutional Convention is Wednesday, Feb. 3, but it’s not clear that the proposal will surface for a vote then. Since it’s a citizen-sponsored amendment, the plan needs support from just 50 lawmakers in two consecutive legislative sessions in order to qualify for the 2018 ballot.
Fattman said he is interested to see the political dynamic of the convention, given that House Speaker Robert DeLeo on Wednesday pledged to keep new taxes and fees out of the fiscal 2017 budget.
“He said no new taxes, no new fees. When we go in on Feb. 3 I think that’s what a lot of members have to think about when they vote. This is a tax, this is a tax increase,” he said. “This is a tax increase vote on Feb. 3. I’m encouraged by the speaker’s position and I think he will be with me.”
Voting in favor of recommending that the proposal ought to pass were Kaufman, committee co-chair Sen. Michael Rodrigues, Rep. Timothy Toomey, Sen. James Timilty, Sen. Benjamin Downing, Rep. Denise Provost, Sen. Daniel Wolf, Rep. James Dwyer, Sen. Eric Lesser, Rep. Thomas Stanley, Rep. James Arciero and Rep. Alan Silvia.