Proposed Constitutional Amendment in Massachusetts Aims to Tax High-Income Earners to Fund Education and Transportation
BOSTON, MA - October 7, 2024 – Massachusetts voters will decide in November 2024 weather to approve a constitutional amendment, known as the Fair Share Amendment, that would impose an additional 4% income tax on annual earnings exceeding $1 million.Proponents say the measure will generate an estimated $1.9 billion annually, dedicated to funding public education and transportation, while opponents argue it could drive wealthy residents and businesses out of the state.
The amendment, formally known as question 1 on the November 5th ballot, represents a important shift in Massachusetts’ tax structure. Currently, the state has a flat 5% income tax rate. If passed, individuals earning over $1 million would pay a combined rate of 9% on those excess earnings. Revenue generated would be earmarked specifically for public education from pre-kindergarten through twelfth grade, and for the Massachusetts Bay Transportation Authority (MBTA) and other regional transit authorities.
The push for the Fair Share Amendment began gaining momentum in 2019,with advocates arguing that the current tax system disproportionately benefits high-income earners while underfunding crucial public services. The amendment required passage by the Massachusetts legislature in two consecutive sessions – achieved in 2021 and 2023 – before being placed on the ballot for voter approval.
The Coalition for Fair Taxation, a leading supporter of the amendment, contends that the additional revenue is essential to address long-standing inequities in school funding and to modernize the state’s aging transportation infrastructure.They point to disparities in educational resources between wealthy and lower-income communities, and the need for significant investment in the MBTA to improve reliability and expand service.
Opponents, including the Massachusetts Fiscal Alliance, raise concerns that the higher tax rate could incentivize high-income earners to relocate to states with more favorable tax climates, ultimately reducing overall tax revenue.They also argue that the amendment’s dedicated funding structure limits the legislature’s versatility to address other pressing needs.
If approved by voters, the 4% surtax would take effect on January 1, 2025. The first revenue generated would be available for allocation in fiscal year 2026, beginning July 1, 2025. The amendment includes provisions for annual reporting on the revenue collected and how it is being spent,ensuring transparency and accountability.
