The Bad News from Taxachusetts
As part of its constitution, Massachusetts has a flat-rate income tax. Since 2020, that rate has been 5.0 percent and was actually higher in some previous years. Various interest groups have tried over the years to change the constitution so that the state government could impose a higher income tax rate on high-income people. Other people successfully and valiantly succeeded in fighting off those attempts.
This month, there was, yet again, a measure on the Massachusetts ballot to change the constitution and impose a higher tax rate on people with high incomes. Specifically, the measure called for a 4-percentage point surtax on the portion of people’s income in excess of $1 million. I had hoped to report that this measure failed.
Alas, I cannot. With 99 percent of the votes counted, 52.0 percent voted Yes, with 48.0 percent voting No. That means that it’s mathematically impossible for the measure to be voted down. If every single remaining vote were a No, that would mean that 51.5 percent are Yes votes and 48.5 percent are No votes.
These are the opening paragraphs of my “The Bad News from Taxachusetts,” IPI, TaxBytes, November 16, 2022.
And the last paragraph:
The requirement that everyone pay the same tax rate on income restrained politicians from raising the tax rate substantially because they knew it would hit everyone. Indeed, sometimes that constraint led politicians to actually cut Massachusetts’ income tax rates. In 1992, for example, the tax rate was 5.95 percent. It fell in steps to 5.0 percent. Sadly, the constraint that led to that happy result is now gone.
Read the whole thing, which is quite short.