Massachusetts Legislature, Taxes and Budget Issues

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THE MASSACHUSETTS LEGISLATURE, which has shown no interest in raising taxes for several years, voted overwhelmingly on Wednesday to greenlight a constitutional amendment that could give voters the chance to assess a 4 percent surtax on household incomes above $1 million.

The vote overall was 135-57 in favor of the amendment. The Senate voted 33-7, with five Republicans and two Democrats (Sens. Anne Gobi of Spencer and Jennifer Flanagan of Leominster) voting against. The chamber’s other Republican, newly elected Patrick O’Connor of Weymouth, voted in favor of the amendment.

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The House voted 102-50 in favor. Thirty-three Republicans voted in lockstep against the measure, joined by 17 Democrats. House Speaker Robert DeLeo of Winthrop and House Ways and Means Chair Brian Dempsey of Haverhill voted for the constitutional amendment, but three members of the speaker’s leadership team, House Majority Leader Ron Mariano of Quincy and Reps. Thomas Golden and David Nangle, both from Lowell, voted against.

DeLeo had indicated he would vote in favor of the amendment, but he has never been clear whether he is an enthusiastic supporter of the measure or whether he merely believes voters should be given the opportunity to vote on whether to include the surtax in the constitution. Senate President Stanley Rosenberg, by contrast, is one of the amendment’s most outspoken supporters on Beacon Hill.

The amendment, if it is approved again during the next legislative session, would go to voters in 2018. The measure would not change the existing 5.1 percent tax rate on income up to $1 million. For income above $1 million, however, the amendment would impose a 4 percent surcharge in addition to the 5.1 percent. The Massachusetts Revenue Department estimates 14,000 state residents would pay the surtax, coughing up $1.4 billion to $2.2 billion. The wording of the amendment directs that the money be used for transportation and education initiatives, but since a ballot question cannot appropriate money the actual allocation of the funds would have to be made by the Legislature.

Rep. Jay Kaufman of Lexington, the cochair of the Legislature’s Revenue Committee, came out of the House chamber after the vote and pumped his fist, saying he was delighted the amendment received the support of 70 percent of the 192 lawmakers who voted. He said he had predicted two-thirds support. The amendment required the support of just 50 lawmakers.

Kaufman opened the debate on the amendment by saying Massachusetts has “an unsustainable tax system” that fails to raise enough money to fund the state’s legislative priorities. He also said the state’s flat income tax means those who earn less pay a greater proportion of their income in taxes. “We have a classic regressive tax system,” he said.

Opponents voiced three primary arguments against the amendment. Some opposed raising taxes at all. Others said the amendment falsely promises the money raised will go to education and transportation when there is no guarantee the Legislature will appropriate the money for those purposes. Finally, many feared a tax on millionaires would drive out of Massachusetts the type of people the state is trying to attract, the type of people who invest in businesses and jobs.

“I’m not here to protect millionaires,” said Republican Sen. Viriato deMacedo of Plymouth. “I’m here to project jobs.”

The Massachusetts High Technology Council said the proposed millionaire tax would give the state the third-highest income tax rate among 15 peer states. Only California at 12.3 percent and Minnesota at 9.85 percent would be higher, the council said. Massachusetts currently ranks 10th on the list.

Meet the Author Bruce Mohl Editor , CommonWealth About Bruce Mohl Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester. About Bruce Mohl Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Nangle applauded DeLeo and Dempsey for holding the line against new taxes the last few years and said the Legislature would be derelict in its duty if it were to turn over the setting of tax policy to the state’s voters. While his district probably includes very few millionaires, Nangle inveighed against the amendment in unusually strong terms.

“It is the introduction of class warfare,” he said. “It is stealing from the rich to give to the poor. We are legislators. We are not Robin Hood.”

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