Massachusetts voters decided to add an extra 4% income tax on individuals making more than $1 million per year. The approved ballot measure will take effect Jan. 1, 2023.
The ballot measure states the extra revenue will be appropriated by the legislature and used for public education, public colleges and universities, and to repair and maintain roads, bridges and public transportation. The income level will be adjusted annually for inflation.
According to the Executive Office of Administration and Finance, the new tax has the potential to increase state revenue by $1.2 billion per year in the near term, which is about 2.5% of the state’s annual budget. However, the office stated the revenue will vary and be unpredictable from year to year because some taxpayers may decide to relocate or adjust their filing status to minimize their tax burden.
Those in favor said it will guarantee those at the top “pay their fair share” and that the money will go to a good cause. Those opposed said it could harm small business owners, family farmers, homeowners and retirees who have built up a nest egg because it includes one-time earnings, like selling a home, investment or business and inheritance.
