Massachusetts's Millionaire Tax Going Very Well, Thank You!
Money for education and transportation — and an $800 million surplus!
In 2022, Massachusetts residents voted in favor of a Fair Tax ballot measure to extra-super-duper-tax those earning more than one million dollars a year and to spend the revenue from that on education and transportation initiatives.
Naturally, there were the naysayers. Those who warned that all of the state’s rich people would move away to their very own Galt’s Gulch or whatever, if they were forced to pay a four percent tax on anything they make over a million dollars. The implication there, of course, is that raising this tax would, ironically, lead to the state collecting less revenue overall.
That didn’t happen! In fact, the state has already raised $1.8 billion in revenue so far for this fiscal year — which is $800 million more than they expected, and they still have a few months to go. The vast majority of the surplus will go to a fund that legislators can use for one-time investments in various projects.
The revenue has already been invested in universal school lunches, in more scholarships to public colleges, in improvements to the MBTA, and to repair roads and bridges. These are all things that will improve the quality of life for everyone, including the “ultra-rich” who happen to live there. The fact is, it’s just nice to live in a society that is more civil, that takes care of its people and its children and that fixes things when they are broken.
Still, detractors are pointing to the fact that many “high-earners” left Massachusetts in 2021 and 2022, before the tax hike went into effect (or was even voted on) as proof that it is going to chase them off.
“Whatever short term financial benefit the state will receive from the income surtax will be outweighed by the long-term negative effect this tax is having on the state,” said Paul Craney, a spokesperson for the conservative-leaning Massachusetts Fiscal Alliance told the Boston Globe, without specifying what that negative effect is.
Here’s the thing — someone who makes over a million dollars a year isn’t going to notice a four percent tax on income over that million on an experiential level. It’s not like they can’t buy the fancy peanut butter anymore, you know? So if they’re leaving over this tax, it is out of sheer pettiness, not because they can have more money and a higher quality of life somewhere else.
I mean, it’s worth noting that many the states with the lowest taxes are also some of the least populated states. Wyoming has no income tax, is the size of 12 Massachusetts...es, and only has 581,381 people in it, compared to Massachusetts’s 6.9 million. Okay, but it’s really unpleasantly windy there. How about New Hampshire? New Hampshire also has much lower taxes, is right next to Massachusetts, and only has a population of 1.9 million. It’s almost as if higher tax rates contribute to a higher quality of life and that many people prefer that over just hoarding wealth.
Moving is incredibly annoying, starting a new life in a new area is not always something people want to do, and I’d have to say that anyone who would put themselves through all of that just so they don’t have to pay an extra four percent tax on what they make after they make a million dollars, in order to feed school children and improve public transportation, is probably a psychopath, and therefore maybe not someone you really want as part of your community. Good riddance!
Additionally, while it’s quite possible that a lot of these people work for themselves or work from home, I think we can probably assume that whoever is paying them $1 million a year to do their job will just hire another person and pay them $1 million instead.
Oh! And where is it that they would be going? Making over $650K a year puts someone in the one percent of top earners in this country, which I think means we can assume that there aren’t, actually, all that many million-a-year jobs to go around. Certainly not if we’re just counting jobs in states with low taxes.
Elizabeth Warren, Pramila Jayapal, and others have introduced bills in the House and Senate for a nationwide millionaire’s tax of two percent — two cents on the dollar for all wealth exceeding $50 million and six percent on all wealth over a billion dollars. This would bring in an estimated $3.75 trillion over 10 years, which we could use to improve the lives of all US citizens. We could have so many nice things!
It’s time to stop living in fear of what millionaires and billionaires — who have made their fortunes off of roads we’ve paid for and employees we’ve paid to educate — will do or where they will move if forced to pay their fair share. That’s no way to live. If they have some place better to go that won’t force them to contribute to improving their community? Let them. Other people will come along and be more than happy to pick up where they left off. But more than likely, they won’t do jack shit because they’re rich, and if they wanted to live someplace else, they’d be there by now.
PREVIOUSLY:
I was eating a bowl of cheerios and I got to thinking about how many people worked to get it to me. At the most basic level there’s the farm of course that grew the grain, but even to get to that point there has to be people who work for the government that guarantee its right to the land, the real estate agents that facilitate the transaction, the banks that loan the money to the farm so it can buy not only the land but seeds and tractors, the fertilizer companies and the water districts, the factories that build the water pipes and sprinkler heads, the people at the John Deere factory and all the vendors that sell the factory the steel and nuts and bolts and tires and wires, the engineers that designed the tractor, the middle men that buy the grain and transport it and store it in a silo until a train can come pick it up and take it to the mill, the markets that sell the contracts that ensure the grain can be delivered intact and on time, the people that build and drive the train, then all the people that work in the mill to grind up the grain and mix it with eggs and water and salt and yeast and bake it, and qc it, and the government inspectors that make sure it doesn’t have ecoli, then the people that package it, and sell it, and account for the money from the sale, then put it on a truck, which first requires people that build the truck and supply it with fuel, and the drivers that drive it to grocery stores, which are designed by architects and built by project managers and carpenters and masons and roofers and laborers and plumbers and electricians, and the people that unload the truck and stock the shelves and bag the groceries and run the cash registers, oh and also the mint that mints the money I use to buy the cheerios, or really the people that work in the bank that processes my credit card, then I put it in a bag which has to be manufactured, then I put the bag in my car which also came out of a factory and requires fuel and maintenance, and I drive it home, then I add milk which also comes from a farm and a distribution center and a store and is kept fresh by electricity which requires a huge workforce to keep humming, and government regulators to keep the whole process of supplying electricity safe, and refrigerators also built in factories to keep the milk fresh, and not to mention the roads and traffic laws and stop lights that keep the trucks moving and me safe driving home, then also the people that built my kitchen table and chairs and the people that manufactured the bowl and the spoon, also the builder that built my house so I have a safe warm (or in my case cool) place to eat, which encompasses all the people that worked to get the components of my house to the jobsite, and performed all the labor to turn those components into a house, and a thousand other people doing a thousand other jobs that I forgot about. Anyway the point is we are all dependent on each other in a million different ways, all day every day. I’m guessing at least 100,000 different people played some part in getting me my dinner. SO that’s what I was thinking about while eating my cheerios…
I grew up on welfare. Dysfunctional family. I remember when I paid $0 Federal and State Income Tax. Just Employment Tax. It sucked. Why? Because I didn't have any money.
Now I make what is to me a lot of money. It's a bit tricky to calculate, because all my money comes through my LLC, so a lot of things most people consider to be personal expenses are actually my employer's expense; and my employer is...me.
But, now I pay a lot of Federal and State Income Tax.
And it's GREAT! I mean, FUCKING AWESOME!!!!
How could that be?
Because I only pay tax on money I earn. And after taxes, I have so much more money than I ever had back when I paid no taxes. That's what matters. How much money one ends up with, not how much one starts out with.
It's really that simple. And everyone knows it. That's why these conversations get so stupid so fast, with rodeo clowns like Arthur Laffer trying to convince people that if we tax the rich less, we'll all have more money. Stupid on the face of it. But it does muddy the waters, and that's the only way to con people into not taxing the people who benefit the most from our system.