'Millionaire's Tax' Could Shake Off Ghosts of Failed Drives for Graduated Income Tax

Thursday, April 7, 2016

Proposals to implement a graduated state income tax have twice been rejected by Massachusetts voters in my memory, first in 1972 and then in 1994.

The margins of defeat in each case were overwhelming:  67% to 33%, and 70% to 30%, respectively.
This year, there’s a coalition called “Raise Up Massachusetts” and it’s basically pushing a simplified, narrower version of the graduated income tax.  They have a pithy name for it: the “millionaire’s tax.”  

“Raise Up” wants to get a referendum on the statewide ballot in 2018 to impose a 4% surtax on all incomes in excess of $1 million per year.  The ballot question would be part of a legal process that would ultimately encode the surtax through an amendment to the state constitution.
Proceeds from the surtax, estimated to be between $1.3 and $1.4 billion annually, would be earmarked for public education and public transportation projects.

“Raise Up” campaign organizers believe the relatively small number of taxpayers impacted by the surtax will work to their advantage: approximately 14,000 wealthy Massachusetts residents, out of a total population of 6.7 million, would be subjected to it.
When I first heard about it, I figured the campaign was as fatally flawed as its 1972 and 1994 cousins.

A majority of voters will not embrace a plan to soak the rich and put hundreds of millions of new dollars a year in the hands of politicians, I thought.

But the more I think about it, the more I think the surtax could come to pass.
Reading what Senate President Stan Rosenberg had to say this past Monday, April 4, at the Greater Boston Labor Council breakfast, helped nudge me further in that direction.

“We need to rebuild the middle class in America and Massachusetts,” Rosenberg said.  “We can’t do it without the investment in education and transportation and housing and energy, and it’s going to require us to shift the paradigm and change people’s minds that they can and should support a change in the constitution to allow us to change the tax system so that those who earn the most pay the most.”

The Senate now has working groups on education, transportation and housing.  These groups are setting the stage for what Rosenberg and many of his colleagues hope will soon be a fruitful debate in the legislature, and beyond, on establishing the 4% surtax.  The housing working group released its report in March.
“When we have the education plan and we have the transportation plan, we’re going to have all the elements we need to be able to go out and argue for the fair share tax plan,” Rosenberg said Monday, according to a State House News Service article on the Labor Council breakfast.  “Fair share tax plan” is the preferred nomenclature at the State House for the millionaire’s tax.

I imagine there are a lot of wealthy and almost-wealthy Massachusetts residents who are ready to dismiss Rosenberg as an out-of-touch ultra-liberal with no appeal beyond the geographic bounds of his district.
That’s how folks used to dismiss Bernie Sanders, the septuagenarian socialist from little Vermont, too.  Last time I looked, Sanders had won six of the last seven state Democratic primaries.

I happened on a quote in a recent (3-21-16) edition of The New Yorker that, in just a few blunt words,  captured why Sanders has become so incredibly popular with young people, the millennials.
Ben Tolchin, who serves as Bernie’s pollster, told the author of the article, Ryan Lizza, that millennials support Sanders “because their generation is so fucked, for lack of a better word, unless they see dramatic change.  What’s their experience been with capitalism?  They have had two recessions, one really bad one.  They have a mountain of student-loan debt.  They’ve got really high health-care costs, and their job prospects are mediocre at best.  So that’s capitalism for you.”

I see those colleges in and around Stan Rosenberg’s district, including UMass Amherst, his alma mater, and think how easy it would be for him to get hundreds, maybe thousands, of student volunteers on the millionaire’s tax bandwagon this fall, should he make a serious effort to do so.  Like Bernie’s acolytes, they ‘d form a formidable ground force.


No comments:

Post a Comment