When the so-called “fair share” amendment to the state constitution takes effect the following year, the highest-earning taxpayers in Massachusetts will be assessed an extra 4% on yearly income exceeding $1 million. The new money, which must be appropriated by lawmakers, will probably be used for transportation and education initiatives. According to the AP, the initiative barely passed with 52% of the vote.
According to Fair Share for Massachusetts campaign manager Jeron Mariani, “our coalition will remain together to guarantee that the money from Question 1 reaches our public school classrooms and college campuses, as well as our roads, bridges, and transportation systems.”
Advocates will have to maintain pressure on legislative leaders to not divert the new funds to other spending areas.
An increase in funding for public education could result in smaller class sizes, better staffing, and higher remuneration for teachers in institutions that are battling pandemic learning loss.
Democrats in the legislature and the incoming governor, Maura Healey, are already planning a significant revamp of the MBTA that might cost millions more each year to maintain the deteriorating infrastructure. For many years, public schools and universities have struggled to maintain their affordability for citizens with middle- and lower-incomes. An increase in financing might lower public college tuition and increase faculty salary. Opponents are concerned that the extra tax burden will deter businesses from relocating to Massachusetts, taking with them higher-paying jobs.
High earners may decide to leave Massachusetts in order to avoid paying the higher tax and keep all of their earnings out of the state coffers. After the AP declared victory on Wednesday afternoon, a spokesperson for No on 1 issued a statement saying, “Today is a setback for the Massachusetts economy, a setback for small business owners, a setback for retirees, and a setback for homeowners who will be covered by this amendment.”
How it Works
The new 4% tax will apply only to income over $1 million, meaning an additional $40,000 per $1 million earned. If a person earns $999,999, they would pay no additional tax under the new law. An income of $1.1 million would be taxed an additional $4,000.
The higher tax is estimated to directly affect the 0.6% of Mass. households that pay around one-fifth of all income tax.