Massachusetts “Millionaire’s Tax” Surcharge Referendum Can Appear On Ballot, Highest State Court Rules
Florida is going to have to make more room.
A statewide ballot referendum in Massachusetts to impose a four percent tax on incomes over $1 million will appear on the November 2022 ballot, after the Massachusetts Supreme Judicial Court ruled on the issue today. That is on top of the flat 5% state income tax.
WBUR reported on the initiative:
A new tax on Massachusetts millionaires would add about $1.3 billion in revenue for the state, according to a new report that analyzes the potential impact of the proposed surtax on high-income earners that voters will consider on the ballot in November.
Massachusetts lawmakers voted last year to put a constitutional amendment on the 2022 ballot that would add a 4% surtax on household income above $1 million, pledging to dedicate the additional revenue to just two areas of spending: education and transportation.
The report estimates that if approved by voters the new tax would be collected from about 21,000 state taxpayers, or less than 1% of all households in the state, who earn about 22% of all taxable income in Massachusetts. Using state and federal data, the center estimated that 2,000 households earned more $5 million in 2019 totaling 11% of all income in the state.
The projection takes into account the likelihood that some high-earners could leave Massachusetts as a result of the policy, while others will engage in “tax avoidance” strategies to lower their tax burden.
From the Opinion released this morning:
Article 48 of the Amendments to the Massachusetts Constitution provides for two processes by which an amendment to our Constitution may be proposed, submitted to the people, and ultimately voted upon. One of these processes begins with a proposal from voters of the Commonwealth, see art. 48, The Initiative, II, § 3, as amended by art. 74 of the Amendments, and the other begins with a proposal from a State legislator, see art. 48, The Initiative, III, § 2….
This case involves the latter: a legislative amendment that would impose a tax on that portion of annual incomes over $1 million, to be used, subject to appropriation by the Legislature, for education and transportation purposes. In preparation for the submission of this amendment to voters, the Attorney General and the Secretary of the Commonwealth (Secretary) have prepared informational materials, which will be distributed across the Commonwealth. See art. 48, The Initiative, II, § 3, as amended by art. 74; G. L. c. 54, § 53. The plaintiffs here argue that some of these materials — specifically, a concise summary of the legislative amendment and one-sentence statements describing the effects of a “yes” vote and a “no” vote — are unfair and misleading and therefore constitutionally and statutorily defective. We disagree….
In 2019, Representative James J. O’Day introduced in the Legislature a “[p]roposal for a legislative amendment to the Constitution to provide resources for education and transportation through an additional tax on incomes in excess of one million dollars.” As required by art. 48, a majority of legislators at two successive joint sessions — the first in 2019 and the second in 2021 — voted to approve the proposed amendment.4 Consequently, the Secretary intends to place this legislative amendment on the ballot for the upcoming Statewide election in November 2022….
The proposed amendment does not address how the Legislature may spend monies other than those raised by the amendment. Consequently, the Attorney General’s summary need not opine on whether, as plaintiffs contend, monies that historically have been spent on education and transportation could, at some future point, be spent elsewhere. The summary need only describe the amendment itself; we hold that it does so fairly, in compliance with art. 48….
We endorse the defendants’ proposed timeline. A legislative amendment requires an affirmative vote at two successive joint sessions of the Legislature, and, despite our invitation, the Legislature has opted not to impose statutorily a more abbreviated timeline on this process….
Conclusion. The matter is remanded to the county court for entry of a judgment declaring that the Attorney General’s summary is in compliance with the requirements of art. 48, as amended by art. 74, and that the Attorney General and the Secretary of the Commonwealth’s one-sentence statements describing the effects of a “yes” vote and a “no” vote are in compliance with the requirements of G. L. c. 54, § 53.
— William A. Jacobson (@wajacobson) June 22, 2022
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