Massachusetts Resurrects Millionaire Tax

Lawmakers resurrected proposals (S.B. 16 and H.B. 86) to amend the Massachusetts Constitution to allow an additional income tax on millionaires.

What Do the Amendments Propose?

Residents who report more than $1 million in taxable income each year would pay an additional income tax of 4%. Massachusetts would use the tax revenues for spending on education and transportation infrastructure. The amendments also include an annual cost of living adjustment to the threshold.

The Massachusetts Supreme Judicial Court upended almost the same proposal in 2018 before it reached voters.

What’s Different Now Than in 2018?

The 2018 millionaire tax proposal took the form of a voter initiative petition. It also proposed:

  • a 4% millionaire tax; and
  • earmarked the revenues for public education and transportation infrastructure funding.

The supreme court ruled the petition was unconstitutional. The court said the petition violated the relatedness requirement under the Massachusetts Constitution. The petition did not articulate a related or common purpose between the spending proposals and the tax.

The current proposals involve legislative amendments to the constitution. A legislative amendment is not subject to the restrictions that apply to a citizen initiative amendment.

What Happens Next?

The general assembly would need to approve one of the proposals by majority vote in the 2019-2020 session and again in the 2020-2021 session.

So, the proposal would not reach Massachusetts voters until the November 2022 general election.

When Would the Tax Take Effect?

If voters approve the amendment, the millionaire tax would take effect after the 2022 tax year.

By Tim Bjur, J.D.

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All stories by: CCHTaxGroup