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Massachusetts “Millionaire’s Tax” Surcharge Referendum Can Appear On Ballot, Highest State Court Rules

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.

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Comments

I think I remember reading promises that 1% of the people were supposed to pay income taxes too.

    pfg in reply to geronl. | June 22, 2022 at 11:40 am

    Oh sure, today it’s claimed that it will only effect the top, top of the wealthiest, and to boot, at a small tax rate. A mere bagatelle, we’re told, n’est pas? To the foolish who would believe that, here’s what would predictably happen.

    Once the 16th Amendment was added to the Constitution (February, 1913) Congress swiftly enacted the Revenue Act of 1913 (October, 1913; Pub. Law 63-16. 38 Stat. 114), progressive rates a heralded feature. That statute was soothingly sold the same way. “Just the top, top earners will be paying, and at a really low rate.” But the 1913 statute was amended almost immediately [e.g., Revenue Act of 1916, War Revenue Act of 1917 (remember, war is Big Gov’s / Democrats’ best friend; lying is second nature to Democrats; Democrat Wilson ran on the platform of no US involvement in the European war, meaning that there would be no dead Americans nor new taxes to pay war costs)]. Suddenly, a huge percentage of the naive, i.e., income earners who were “promised” to remain unaffected, was included among the so-called “top, top earners.”

    And the rates: boy, did they go up! The “normal” (the so-called “small”) rate doubled, from 1% (1913) to 2% (1916) (at the high end); the “surtax” rate more than doubled, from 6% (1913) to 13% (1916) (again at the high end).

    But it was the Revenue Act of 1918 that really brought the fangs out, setting the tone for what we are saddled with today, roping in everyone productive. No longer was the left singing a “just tax the wealthy” refrain. Now it was “Tax Everyone.” Take note of how fast that happened. The combined progressive high end tax rate was now >75%. The significance of the 1918 statute was the corralling of everyone productive into paying the income tax. And it remains with us >100 years later, except now an expanding Welfare Class (which didn’t exist in 1918; that magical event of “creation by statute” had to wait until Democrat LBJ’s Great Society programs) has been saddled onto a shrinking productive Tax-paying Class.

      1073 in reply to pfg. | June 22, 2022 at 6:31 pm

      If only they did tax EVERYONE. Less than half pay income tax.
      Instead of Taxation without Representation we have Representation without Taxation.

      I believe in Charity.
      I just don’t think any Government should be considered a Charity.

stevewhitemd | June 22, 2022 at 11:16 am

It’s going to be yet another case of “bad luck”…

Encouraging their millionaires to move to Florida is the strategy. Voting patterns and funding of Democrat political activism is the seed to turn Florida purple.

    henrybowman in reply to George S. | June 22, 2022 at 2:30 pm

    But why? Why would these people move to DeSantis-infested Florida? When they could move to another socialist hellhole with equally crap weather politically- and environmentally-compatible state such as Michigan, Illinois, Minnesota, or Oregon West?

    We should encourage this with great zeal.

    “Florida? You’re crazy!
    Alligators!
    Cottonmouths!
    Unrestricted gun ownership!
    Confederate flags!
    Re-puuuuuuuublicans!!”

      OwenKellogg-Engineer in reply to henrybowman. | June 22, 2022 at 8:04 pm

      Exactly! Who would want to move to DeSantistan, when you could move to of those other socialist paradise states,?

Aren’t there a few endowments and trust fund babies in Massachusetts that might be tapped as well if the legislature is interested in finding new pots of money to tax? /S

There are going to be more Hockey Fan Jerseys sold in Florida than the rest of the country…

bobinreverse | June 22, 2022 at 11:40 am

Maybe Belichick Kraft will follow Brady. Jax/Fish/Bucs always need coach and Uncle Bob known to frequent WPB massage joints.

E Howard Hunt | June 22, 2022 at 11:47 am

And everything under the sun will be deemed for educational a transportation purposes. Massachusetts has a law known as the Dover Amendment, which changes modest middle class neighborhoods into sewers overnight. ALL local residential zoning restrictions are null and void as regards a non-profit that buys a residential home for religious or educational purposes. Methadone clinics, halfway houses, facilities warehousing vegetative wards of the state are all deemed educational by the black-robed, crooked, rapacious, alcoholic, government tit-sucking set.

    Dathurtz in reply to E Howard Hunt. | June 22, 2022 at 1:47 pm

    It is more simple than that. They just reallocate the other funding for education and transportation and replace it with this new funding.
    Happens all the time.

Maybe those high earners will move to NH or Vt.

So for the 2,000 households earning more than $5 million, avoiding that state income tax by moving to Florida puts a minimum extra $410,000 cash in their pockets each and every year. Somebody at the $10 million level would save $860,000. Anyone with a business that can move will do so, which includes many financial businesses, which can operate from almost anywhere.

So, no more millionaires in Mass? I’m forecasting an influx of new residents for the State of Florida–let’s just hope the liberals don’t ruin Florida like they do every other state they touch

    OwenKellogg-Engineer in reply to rochf. | June 22, 2022 at 8:10 pm

    I’m already seeing enough reason for me to start thinking of relocating out of Florida given the huge influx of new arrivals, and the commensurate delay in upgrading transportation facilities. I-4 just completed a massive rebuild, and it’s already seeing the effects in central Fla. Homes can’t get built fast enough, as all the new buyers are flush with cash offers; the prime rate hike has no effect in reducing their demand.

    Now, where to go…..think,think,think. Maybe Shangri-la?

    Another Voice in reply to rochf. | June 23, 2022 at 1:13 pm

    It’s been happening in all Blue states which think the Corporate world who are the largest employers and support the state government are their “go to piggy banks”. Just today the news drop gave Florida one more. WSJ posts that ” billionaire Ken Griffin is relocating his big hedge-fund firm Citadel from Chicago to Miami, the third major employer to announce the move of a corporate headquarters from Illinois in the past two months.”

      Another Voice in reply to Another Voice. | June 23, 2022 at 1:31 pm

      The flip side of this mass migration into Florida is the mind set of the very same CEO’s and those who work within or for them. They to will follow the move and with them bring their ethos which will have a direct impact on the independence which now exists in their new state. Like NY, which has 10,000 less sq. miles than Florida, Florida has several metropolitan centers which are growing. Yet the vast amount of the centrist part is rural and small community. How long will it take for them to have the weight of vote to bring their progressive ideas into legislation?

This is what they did to provide funding for free-preschool (3-4yo), or as I called earlier indoctrination, by taxing those making over $250K a year. So far they have collected the money, but because of wuflu have not taught the classes nor found the facilities or teachers to do it. Wonder what that money is getting up to (give aways to feral humans, cough, cough)? Aswith all elections here, I suspect that it didn’t get enough votes to pass, but they said it did anyway.

It ought to be unconstitutional to impose a tax on any minority group, without the approval of a majority of that minority. The majority of voters, who would not be affected by the proposed tax, ought not be allowed to vote on it, and neither ought their representatives in the legislature. I don’t care whether that minority is blacks, Jews, or millionaires; having the majority decide to tax it adds up to taxation without representation. If there’s a reasonable argument to be made that millionaires ought to pay an extra tax, put it to them and convince a majority of them to consent to it.

    henrybowman in reply to Milhouse. | June 22, 2022 at 2:34 pm

    Good idea. Of course, that would just lead to gaming the system by artfully defining the target group.

The Gentle Grizzly | June 22, 2022 at 2:41 pm

Seems so many of the original 13 colonies, who fought off the yoke of being subjects, now have taxes, rules, regulations, and other such things that are far worse than what caused the Revolution in the first place.

That, and a lot of them talk funny.

Ugh, that means that rich liberals will move to free states like Florida and Texas to avoid taxation, but they won’t change their ideology and force the same policies in free states that they supported in Massachusetts.

    guyjones in reply to Guardian79. | June 22, 2022 at 5:40 pm

    Exactly. The Carolinas will get a big chunk of these parasitic Dumb-o-crats, too. Locusts bringing their manifestly corrosive and ruinous socioeconomic ideology with them, along with their insufferable narcissism and their obnoxious sanctimony, thus ruining their new, well-managed host states.

Boy, Rt3 into NH was crowded enough as it was, now it will be a nightmare.

It doesn’t take a Nostradamus to predict his tax will be lucky to collect half of the amount projected. Accordingly, MA Democrats, in all their galactic-scale idiocy, will immediately attempt to double the tax to 8%..

    jb4 in reply to MarkJ. | June 22, 2022 at 4:58 pm

    NJ did exactly that over the years. It first imposed a “millionaires tax” increment of 2.6% at $500k. That wasn’t good enough, so they have since added another 1.8% at $1 million.

Taxachusetts!

Get ready Red states as an influx of MassHoles moves your way.

Glad to see the tax upheld. The rich can usually finagle something with enough tax accountants and letting each other know what they can do.
Be hilarious to see the tax get totally avoided by 99% of the millionaires through some avoidance schemes leaving their schools, transportation and vote buying bullschiff with barely enough money for the politicians to steal.

Capitalist-Dad | June 23, 2022 at 10:55 am

So property rights are second class rights in Democrat-run kleptocracies, and your property is only secure until the looters in charge can gin up a majority that votes to confiscate it. We know this because Democrats reject the notion of natural rights—to be secured to ALL citizens—preferring to presume any rights we might enjoy are theirs to grant or withhold. This way only Democrat Marxist loyalists will have any rights.