For Immediate Release: April 7, 2022
BOSTON, MA – Currently, Massachusetts has an “upside-down” state and local tax system, meaning those with the highest incomes pay a smaller share of their income toward state and local taxes than the rest of us. A “millionaire tax” would help turn our tax system right side up by applying an additional tax to the portion of a household’s taxable income that exceeds $1 million a year. A new report from the Massachusetts Budget and Policy Center (MassBudget), “Millionaire Tax Would Make Massachusetts Tax System Fairer,” explores the Fair Share Amendment’s potential impact on the state’s different income groups and how that would affect tax fairness.
BOSTON, MA – Currently, Massachusetts has an “upside-down” state and local tax system, meaning those with the highest incomes pay a smaller share of their income toward state and local taxes than the rest of us. A “millionaire tax” would help turn our tax system right side up by applying an additional tax to the portion of a household’s taxable income that exceeds $1 million a year. A new report from the Massachusetts Budget and Policy Center (MassBudget), “Millionaire Tax Would Make Massachusetts Tax System Fairer,” explores the Fair Share Amendment’s potential impact on the state’s different income groups and how that would affect tax fairness.
The report finds:
- The Fair Share Amendment would raise the average share of household income paid in state and local taxes by the top 1% from 6.8 percent to 8.7 percent.
- The average household income of the top 1% is $2.4 million a year in Massachusetts. This increase would bring their share of household income paid in state and local taxes closer to the average 8.9 percent paid by households in the bottom 99%.
- Less than one percent of Mass. households—fewer than 7 in every thousand—would see their taxes increase under the Fair Share Amendment.
“Tax fairness is an important feature of any well-designed tax system,” says Kurt Wise, the report’s author and a Senior Policy Analyst at MassBudget. “Unfortunately, Massachusetts’ state and local system is not fair; it’s upside down. An additional tax applied only to the portion of a household’s income above $1 million would help turn our tax system right side up.”
The report is the latest in a series from MassBudget analyzing the racial and economic impacts of raising tax rates on very high-income households. The recent A Millionaire Tax Would Advance Racial Justice in Massachusetts report found that a higher tax rate on income over $1 million a year would be paid overwhelmingly by very high-income, white households. Further, the investments made possible with the resulting revenue could have a disproportionately beneficial impact on Black, brown and Hispanic communities. Due to a centuries-long history of systemic racism, these groups have much lower average household incomes and continue to face obstacles to economic opportunity.
“A millionaire tax would level the playing field,” says Marie-Frances Rivera, President of MassBudget. “With nearly $2 billion in new revenue, we can make sustained, transformational investments in every community in the Commonwealth. Adopting a millionaire tax is the way we make racial and economic equity a reality. It’s a win-win-win for the people of Massachusetts.”
Key staff related to these studies are available for additional questions or comments upon request.
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Contact:
Reginauld Williams, Communications Director
617-426-1228 x102, rwilliams@massbudget.org
