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MASSACHUSETTS’ NEW MILLIONAIRE TAX IS DOING BETTER THAN EXPECTED  
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Hayes Brown
May 25, 2024
MSNBC
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_ The Biden campaign would be smart to highlight the windfall a new
surtax on millionaires is generating in its first year. _

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Massachusetts, the former colony that hated taxes so much it led the
rebellion against England, has a new state tax
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shows just what’s possible when the wealthy are made to pay their
fair share
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The Boston Globe reported this week that the Fair Share Amendment,
also known as the “millionaires’ tax,”
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exceeded the amount it was projected to raise for the current fiscal
year — by a lot. State lawmakers had budgeted $1 billion in
spending from the new revenue. As of Monday, the 4% surtax on annual
income over $1 million had raised $1.8 billion, and there are another
two months to go before the fiscal year ends.

For those of you who aren’t great at math, the numbers mean
there’s already an $800 million surplus from the first year of the
tax alone. Lawmakers stipulated that the surplus be put aside
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a specified reserve account that can be used for one-time investments
into initiatives that may include education programs and new
transportation projects. It’s a smart idea, not only to help silence
critics who predicted the money would be blown immediately on
shortsighted schemes, but also to guarantee that the new funding
stream is sustainable before it’s relied on too heavily.

The early success of the new tax — which voters approved in a 2022
ballot initiative — is heartening for people who think the wealthy
should help their communities prosper.

The early success of the new tax — which voters approved in a 2022
ballot initiative
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is heartening for people who think the wealthy should help their
communities prosper. But there’ve been few opportunities to show
what happens when the wealthy are taxed more given the conservative
fetish for cutting taxes on the rich over the last few decades.
Starting in 2018, for the first time in the country’s
history, billionaires paid a lower effective tax rate
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working-class Americans.

Not only did the massive tax cuts lead to calls to cut government
services, that lack of revenue has helped blow a big hole in the
federal deficit and expanded the total debt the U.S. owes. That, in
turn, has prompted demands for more budget cuts from Republicans
who only seem to remember they dislike deficits
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a Democrat is in the White House. President Joe Biden has pledged
instead to focus on bringing more money into the Treasury
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in part by raising taxes on businesses and imposing a 25% minimum
income tax on billionaires
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As you can imagine, none of those plans has exactly gone over well
with Republicans who want to see former President Donald Trump keep
the gravy train rolling [[link removed]] for
the rich.

But the few steps that Biden has managed put into place to get the
wealthy to pay up are already paying dividends. The IRS announced
earlier this year that it had collected more than half a billion
dollars in back taxes
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millionaires, thanks in large part to increased capability that a
boost in funding has provided. More are scrambling to get their
financial houses in order
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the odds of being audited are higher, with the newly muscular agency
starting to warn wealthy individuals who haven’t filed their
returns
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pay up.

It’s my hope that Massachusetts’ people-driven win serves as a
model for what’s possible at the federal level.

There are still some doubters
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it comes to Massachusetts’ new millionaires tax. A major concern is
that it will further drive people and businesses out of the state,
ironically reducing the total tax base the Legislature can draw on.
But the idea that there’s some low-tax haven waiting for them
elsewhere is a myth that has hasn’t held up well lately. Newcomers
to supposed tax havens such as Texas, where income taxes are
nonexistent, or Montana, where they’re low, are discovering that
those states instead draw revenue on the thing they have in abundance:
land. Property taxes are high and getting higher
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more people move there and drive up the values of their neighbors’
homes as well, but get very few services provided in return
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Considering that disparity between the libertarian low-tax fantasy and
the reality on display, it’s my hope that Massachusetts’
people-driven win serves as a model for what’s possible at the
federal level. Crucially, the 2017 Trump tax cuts expire at the end of
2025. The Congressional Budget Office
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the full package would increase annual deficits beyond baseline
projections by $3 trillion over the next 10 years. That’s a
mind-boggling amount of money, most of which would be going into the
pockets of the wealthy
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than being invested in programs
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help the vast majority of Americans.

Biden has indicated that he wants to keep the reduced income tax
rates
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the costliest part of the package, but only for those making less than
$400,000 per year, using the revenue to offset the cuts for the middle
and working class. But that’s only going to happen if Democrats hold
the White House and both chambers of Congress next year. I can only
hope that the Biden campaign and other Democrats put Massachusetts
front and center in the messaging and let Americans know that society
benefits when millionaires and billionaires aren’t allowed to keep
selfishly hoarding their wealth.

_Hayes Brown is a writer and editor for MSNBC Daily, where he helps
frame the news of the day for readers. He was previously at BuzzFeed
News and holds a degree in international relations from Michigan State
University._

* income taxes
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* Income Inequality
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* tax reform
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