The pandemic had a devastating impact on learning and well-being.
And a return from isolation has reminded us what happens when we neglect our public transit, roads, and bridges.
But raising taxes through a poorly-constructed amendment to the Massachusetts Constitution on the hopes that Beacon Hill will dedicate the revenue to education and transportation is not the solution.
That’s why the Charles River Chamber is urging a “no” vote on Ballot Question 1, also known as the Fair Share/Millionaires’ Tax.
Here are five reasons why:
Question 1 would add a 4% tax on income over $1 million at a time when the Commonwealth is sitting on a multibillion-dollar budget surplus and billions in unspent federal aid. And this measure only raises taxes, it doesn’t address income disparity by lowering taxes for anyone else.
Drafters of this amendment made a mistake by not exempting one-time millionaires, including anyone who sells a business or property. It fails to exempt small business owners who generate their income through pass-through entities such as sole proprietorships, partnerships, and S corporations. And it penalizes joint income filers, taxing a couple earning $1 million the same as an individual.
Embedding an 80 percent tax hike into the state constitution is not the same as passing a law to raise taxes. It would take four years, two constitutional conventions and another ballot referendum to make modifications if indeed our Legislature would even go along with any changes.
There is no guarantee that one extra dollar will be spent on transportation or education. Back when this tax hike amendment was being written lawmakers rejected a proposed change that would have required all new dollars to be added to what’s already being spent on those two areas. Legislators rejected that idea, instead giving themselves the ability to use the surtax revenue to replace dollars now being spent on these needs.
Most significantly, we fear the surcharge will harm Massachusetts’ competitiveness. Employers and employees don’t move here for our weather or our housing supply: They move here for our talent. In the era of remote work, entrepreneurs, innovators, and investors have more choices, while the nation’s political climate has sharply limited any influx of foreign talent. A talent drain won’t only impact high-compensated jobs but our local small businesses that depend on those individuals as customers too.
Well-funded education and transportation systems are essential to our economic vitality. But there are other ways to meet our needs, without harmful economic impacts. Back in 2019, for example, our chamber stood with business organizations across the state and recommended a package of still applicable revenue recommendations to address our transportation needs that were ignored by Beacon Hill.
A recession is looming. No other state is considering raising taxes this year. Our state is flush with cash. And we’re expecting a likely influx of billions from the federal infrastructure and climate bills.
There’s time to go back and redo this flawed proposal. We urge a "no" vote on Question 1 this November.
A word about our process
After two months of deliberations and a chamber-sponsored forum, the chamber’s Board of Directors reached a unanimous consensus (with three abstentions and one absent) on our recommended "no" vote on Question 1.