Opposition to millionaires’ tax heats up with lawmakers poised for ballot vote

Adding the millionaires’ tax on next year’s statewide ballot is up for a vote Wednesday as opponents argue the hike is unnecessary and would stifle the state’s economy at a time when tax revenues are climbing.

“This is the wrong tax increase at the wrong time,” said David Tuerck of the Beacon Hill Institute for Public Policy Research, during a Tuesday briefing with reporters.

Supporters of a proposed 4% surtax on all income over $1 million say the tax would help level the playing field for low-income residents by charging the wealthy more and funneling the revenue to transportation and education investments.

But as tax revenue collections continue to far outpace projections and billions in federal coronavirus dollars flowing in, Tuerck said there’s no need. Massachusetts raked in $4 billion in tax collections in May more than twice what was collected in May 2020 and $2.1 billion — or 111.4% — over benchmark, according to the Department of Revenue.

A BHI report released Tuesday estimates the proposal would actually generate $1.23 billion in new taxes in 2023 — far less than the $1.9 billion projected by the Department of Revenue six years ago.

Revenues would climb to $1.5 billion by 2027, according to the 17-page report.

Tuerck blamed the discrepancy on the assertion that “proponents don’t bother to figure out what it will do to the state economy.”

The study paints a dire picture of “shrinkage” in the economy — a position proponents of graduated income taxes like the so-called millionaires’ tax frequently refute.

Director of Research William Burke on Tuesday told reporters the tax would cost as many as 9,329 private-sector jobs in the first year alone. He also cautioned as many as 21% of high-earning Massachusetts households — 4,388 filers — would flee the Bay State for lower-cost states.

Andrew Farnitano of The Raise Up Coalition, which backs the bill, said last week “investments are needed now more than ever to lift up our economy for everyone and to ensure Massachusetts remains a great place to live, work, and raise a family.”

The coalition lost an attempt to place the tax on the 2018 ballot when it was struck down by the Supreme Judicial Court as ineligible because it would require a change to the state’s constitution.

Lawmakers in a joint session on Wednesday will hold a constitutional convention where they will vote on placing the Fair Share Amendment on the 2022 ballot. Lawmakers must pass the proposal by a simple majority.

Last time the proposal last went before the Legislature for a vote in 2019, it easily passed in a 147-48 vote. A second vote is procedurally required.

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