New report helps voters understand proposed tax on millionaires

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Newswise – A report released today by the Center for State Policy Analysis (cSPA) at Tufts University’s Jonathan M. Tisch College of Civic Life examines the top voting question facing voters in Massachusetts this fall: proposal to increase spending on education, public transit and transportation with a 4% surtax on income over $1 million.

Earlier analysis by the CSPA found that this tax on millionaires would raise about $1.3 billion in 2023, after taking into account high earners who leave the state or otherwise reduce their tax liability.

Today’s report – the first in a series that will examine the four issues of the November 8 ballot – focuses on the potential benefits, underestimated risks and common arguments on both sides of the issue. Key findings include:

– The millionaires tax would increase funding for a number of high-priority spending areas, potentially reducing economic and racial inequality and improving student outcomes.

– Although millionaire tax money is explicitly earmarked for education, transit and transportation, this prior commitment will be difficult to fully sustain. Spending in these areas is expected to increase by 30 to 70 cents for every dollar generated by the tax, with the rest diverted to other parts of the budget.

– Millionaire tax revenue would be highly volatile, rising rapidly in good economic times and falling sharply in downturns.

– About 0.6% of households would pay this tax in 2023. This number will increase somewhat over time, but likely at a slow pace.

– Changing the Massachusetts Constitution – as this ballot question does – makes it more difficult to unroll or adjust the tax on millionaires, in the event of unintended consequences.

READ THE FULL REPORT

“As we approach November, the debates over the millionaires tax will be heated,” said CSPA executive director Evan Horowitz. “We hope today’s report gives voters the information they need to cut through the noise and make informed decisions. »

cSPA provides expert, nonpartisan analysis of legislative proposals and voting issues in Massachusetts. It is based at Tufts University and guided by a bipartisan advisory group. The CSPA is supported by Tisch College as well as a diverse group of funders from all political backgrounds. These funders have no involvement in CPHA research.

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