In the traditionally well-heeled blue state of Massachusetts, a powerful progressive group is eyeing the state’s one-percenters as the target of a new income tax that nearly doubles the current rate.
Raise Up Massachusetts, a self-described “coalition of labor, faith, and community organizations,” has an existing track record of influence—they were behind a successful push for statewide paid sick leave for all workers, full and part time. That law goes into effect this July 1.
Bolstered by the success, the group has turned its attention to the top earners in the state by preparing to ask for a bump from the state’s current flat income tax of 5.15 percent to a tentative 9 percent, with the hope of passing along a ballot petition by the end of summer, and collecting signatures soon after.
Even if they gather millions of John Hancocks, the proposal won’t see the ballot until 2018, as it would require an amendment to the state’s constitution, which decrees the flat tax.
By setting their sights on those that earn more than $500,000 annually, the group believes they can bring the state an additional couple of billion dollars—well over the $1.5 billion budget shortfall it faces. Currently, to effectively find yourself in the “1 percent” of Bay State residents, you need to make $532,000 a year. This is nearly 10 times greater than the average statewide income of $57,000, the nation’s third-highest.
Higher taxes for those with higher incomes is far from a novel idea—Massachusetts is one of only seven states with a flat income tax—but the concept of leveling a separate, higher and direct tax at the top tier of earners is a concept that is gaining popularity as the income disparity gap continues to widen.
Nationally, the top 1 percent saw income increase 200 percent between 1979 and 2007, and even more, that number jumps to 366 percent in Massachusetts. Those at any other place on the totem pole only grew 18.9 percent and 51.7 percent respectively during the same period. Which is to say, as the rich get richer, and the poor get, well, not richer.
In 2011, the top 1 percent of earners paid 35 percent of all federal income taxes.
According to Raise Up, it’s just a matter of fair being fair. When approached for comment, the group responded with a boilerplate statement via Stephen Crawford, of the group’s PR firm Crawford Strategies.
“Our economy depends on good public schools for our children, affordable higher education, and a transportation system that lets people get to work and customers get to businesses. Massachusetts cannot sustain a strong economy without smart investment in education, transportation, and other critical needs that strengthen our communities and allow working families to get ahead.
“A constitutional amendment asking our highest-income one percent of residents, who now pay a smaller share of their income in state and local taxes than the rest of us, to pay their fair share is one of the policy options Raise Up Massachusetts is considering to help improve our schools, make higher education more affordable, and fix our crumbling transportation system.”
While it’s unclear just how the “highest-income one percent” are paying a “smaller share of their income in state and local taxes” in a state that constitutionally mandates a flat tax rate for all residents, this article in The Boston Globe attempts to lay it out for you—it’s about your share of income, not about the percentage itself. Taxing the wealthy at a higher rate is also a very popular concept among most Americans—except the rich ones, no doubt.
It’s worth noting as well that, for a state with a budget deficit, Massachusetts residents were quick to repeal the 6.25 percent tax on over-the-counter alcohol sales back in 2010. But then, it’s a lot easier to say “cheaper booze” than it is “help the rich save money.”
Besides, they have the (aptly? Ironically, in this case?) named Tea Party for that.