Here’s something you might not know about liberal Massachusetts: In the past four decades, the commonwealth has seen the third-largest decrease in taxes of any state. The victims of this trend are public schools, mass transit and low-to-middle income earners. The gains, unsurprisingly, have mostly gone to the rich. And what we’re left with today is a twisted paradigm in which the wealthiest residents pay a much smaller percentage of their incomes than the rest of us.
How much smaller? According to a recent report by the Massachusetts Budget and Policy Center, the top 1 percent of local taxpayers pay about 6.8 percent of their income. The bottom 20 percent of earners, by contrast, pay 10 percent. This is largely thanks to property and sales taxes, which are regressive taxes that disproportionately impact lower-income taxpayers. In a similar way, the recent (controversial) MBTA fare hikes are something of an unofficial regressive tax — a means of raising additional revenue that places unfair burden on residents with modest incomes.
It’s worth mentioning the MBTA here because in Massachusetts, a state that many people (local and beyond) like to hold up as an exemplar of progressive values, we’re living with the entirely predictable consequences of cutting the 1 percenters’ tax liability. Our public schools and colleges are literally crumbling. The same goes for our regional subway, commuter rail and bus systems. Those not only need to be repaired, but expanded to people who have no access to mass transit and are thereby forced to drive to work — contributing to our insanely bad traffic, which transportation analytics studies have dubbed worse than the congestion in Los Angeles.
The top 1 percent of local taxpayers pay about 6.8 percent of their income. The bottom 20 percent of earners, by contrast, pay 10 percent.
These are not new problems — they’ve been getting worse for decades and negatively affecting the quality of life in Massachusetts. And what’s been missing from the conversation about these problems for way too long is the honesty and political will to understand their root cause and tackle it.
Next week, the people of Massachusetts can choose to do that.
A new measure to make Massachusetts’ tax code more progressive is picking up steam on Beacon Hill. Amendment 1357, a state budget amendment introduced by Rep. Mike Connolly, would raise taxes on long-term capital gains from roughly 5 percent to almost 9 percent. The revenue windfall from the amendment would amount to about $1 billion per year, and since the overwhelming majority of capital gains go to the wealthiest households, the tax increase would primarily affect those who’ve been getting off easy when tax season arrives.
More than 15 state representatives have endorsed Connolly’s effort thus far, but the obstacles that stand in the way Amendment 1357’s passage are significant. Similar efforts to raise taxes on the wealthy in Massachusetts have failed. The most demoralizing setback in recent memory was the defeat of the Fair Share Amendment, which would have enacted a 4 percent tax on the portion of a resident’s income that exceeded $1 million. The additional revenue, an estimated $2 billion each year, would have been used to fund public education, transit and infrastructure projects.
Activists from Raise Up Massachusetts spent years collecting enough signatures to get the Fair Share Amendment onto the 2018 state ballot. The amendment — which came to be known as “the millionaire’s tax” — was a popular idea that garnered consistent support from a majority of voters in Massachusetts. Attorney General Maura Healey declared the amendment legally sound. This incurred the animosity of business groups, which took Healey to court and lobbied the Massachusetts Supreme Judicial Court to remove the “millionaire’s tax” from the ballot last November.
Our failure to enact more progressive taxation is something we’ve paid for with our schools, our transit, our infrastructure and our incomes.
Unfortunately, the business groups won: The Massachusetts Supreme Judicial Court declared the Fair Share Amendment unconstitutional.
On the merits of policy and consequence, Massachusetts is a theoretically progressive state that suffered an identity crisis during the past few decades. Our increasingly regressive tax code (in spite of clear public support for progressive taxation), and our paradoxical failure to amplify lawmakers who will actually fight for such tax reform without being cowed by moneyed special interests, is bizarre and mystifying. But thanks to Connolly and co-sponsors of Amendment 1357, we have another chance to fight for the tax code that most of us actually want.
On Monday, April 22, a minimum of 16 state representatives must stand in order to hold a roll call vote on Amendment 1357. If that vote happens and fails, Amendment 1357 will be put in a drawer, where it could either wither and die, or come back in the future as part of a different bill. But if enough House members vote for Amendment 1357, it will be adopted as part of the House budget. From there, if the Massachusetts Senate adopts the same measure during its budget vote this May, the capital gains tax hike outlined in Amendment 1357 will be part of the budget that's sent to Gov. Charlie Baker's desk.
Our failure to enact more progressive taxation is something we’ve paid for with our schools, our transit, our infrastructure and our incomes. We deserve better. If you support Amendment 1357, call your state representative, tell them to co-sponsor it if they haven’t already, and tell them to stand up for the roll call vote when the House convenes on Monday.
Kurt Vonnegut, a hallmark of high school English curricula in Massachusetts, once wrote that in America, “[the poor] do not love one another because they do not love themselves.” Making the rich pay their fair share of taxes would prove him wrong and probably make him happy. But more importantly, most of us would be happier too.