$1.5 billion in estimated revenue: A look at the Massachusetts 'millionaire's tax' first year taxing the rich
$1.5 billion in estimated revenue: A look at the Massachusetts 'millionaire's tax' first year taxing the rich
Advocates promised the new tax would bring in over $1 billion a year in new revenue. And they quickly saw their predictions surpassed: the state Department of Revenue estimates it will generate over $1.5 billion this fiscal year.
I love that the main criticism is that this will cause the ultra wealthy to leave the state. That just seems like a reason to implement this nationwide rather than at the state level.
What, the people who buy elections are fleeing? Sign me up for that.
I mean, an eroding tax base is a problem. I just think the solution is to drag them kicking and screaming to pay back into the system that enabled them to become so stinking rich rather than chasing them off/eating them. The Guillotine of the first French Republic sure did feel good until the reign of terror rolled in.
I remember seeing this argument about billionaires and corporations leaving the US if they are taxed fairly at a national level. If that were the case then 1. The US wouldn’t lose out on revenue it wasn’t losing out on already, and 2. The “free market” or the government would adapt to fill the abandoned niche.
There are already places (in the U.S. and other countries entirely) with far, far lower taxes than MA. Why haven't rich people moved already?
Yea except I'm sure our federal government would just blow it on more missles and bullets. At least here it's doing good things like feeding kids.
Fun fact! Where do you think those missiles are designed? It's not all universities in Boston.
It did happen to New Jersey, Norway and France. Rich people leave when you tax them. I'm not arguing against the law, but to prevent "flight of the rich", the law has to be applied universally. Or if that can't happen, do what Norway did, tax wealth flight.
I’ve read studies that indicate the tax flight from NJ wasn’t as bad as people made it out to be as net tax revenue still increased and that some of the migration can be attributed to factors other than the tax increase. Still, I agree a blanket tax on the rich is ideal.
It's how you tax. Some Norwegians left because not the income but the fortune was taxed. And by fortune also the value of stocks and such. The issue for some was they needed to sell off stocks to pay the tax. Also Norway established a new tax that tax the fortune if you leave. I am ALL for taxing the wealthy, but if the money has already been taxed....
Even if it's not implemented nation wide, there's the implication that the state is losing something by these people leaving. I suspect they're contributing little by being there though.
Even that fear is not really supported by data, according to Cristobal Young’s The Myth of Millionaire Tax Flight.
I voted for this. There was a lot of outright blatant lies on the commercials against this.
I forgot it even passed until my kid started kindergarten in the fall and during registration we were told starting that year all school lunches are free.
Wow, imagine living in a functioning society... And that's just a taste.
Holy fuck I want more
This is what you get when you curbstomp conservatives at the polls:
P R O G R E S S
If they want to leave then good riddance. If you aren't willing to contribute to society then go live on a deserted island.
They tried this before with the Minerva Reefs. It was, in fact, not their land to take and they folded like a folding chair. Google it.
my favorite part about reading the relevant Wikipedia article is the libertarian magazine claiming the islands were "more or less reclaimed by the sea". As if the people already there weren't people but fish or something. For those curious: Here is the Wikipedia article
I'm an international student in MA, I remember getting SMS spam telling me to vote against it since it is aimed against retired people and veterans. Don't ask me how
Because there's probably a significant number of affected rich folks who are retirees, vets, or both. Though, the propane you saw insinuates that it's the other way around - that a significant number of retirees and vets would be targeted by the new law. It's a pretty common tactic used against dumb people who can't tell the difference. Good on you for seeing through it.
"Think of the veterans!" is almost as ubiquitous as "think of the children!" in terms of political propaganda, and there are areas of Mass that are basically retirement communities and rich people's summer houses (often at the same time). Convincing grandma and grandpa that the government is coming for their retirement funds is an easy way to get them to vote against their interests, and in some places they make up the majority of voters.
Fun fact, here in eastern Mass we refer to the wealthy summer folk as "snow birds" because they migrate south to Florida during the fall and migrate back north at the end of spring. There's some very red areas of Mass because of these people, as they only care about keeping the taxes on their summer homes low and don't care at all about the communities that their houses are in.
This appears to be a tax on regular income, but I thought that very rich people set up their finances so that their income appeared as carried interest, capital gains, etc. Are those subject to this tax?
According to this article I found, capital gains count as income for Massachusetts state taxes:
Edit: just realized the bank I linked to lol
Capital gains is always taxed at your normal bracket for holdings less than a year old and fall under special long term brackets for holdings >1 year. Those brackets are much smaller than income.
Capital gains isn't the issue. The issue is people taking out loans against their securities or other assets at often very affordable rates (until recently). Those loans are their income, the interest on those loans are deductible and they never have to sell their assets.
As long as interest paid is lower than taxes on capital gains the behavior will never shift.
For readers who want to learn more:
https://smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes
I heard about it last year on a podcast. It's apparently very common among the ultra wealthy.
The tax is on all taxable income not just regular wage income. Capital gains and carried interest are taxable income. They are subject to the tax if they make over the $1mil annually.
Capital gains are taxed less than regular wage income. Max capital gain rate is 20% while the max wage income tax rate is 37%.
About fucking time now the feds should do the other 49 states. But we all know that will never happen.
Tax them until they wanna move to Mexico... see if they prefer paying taxes over loosing a finger 🤘. Sometimes the kid nappers send a finger. If you don't pay they send the rest of the body in installments. But paying taxes is too burdensome I suppose.
Billionaire named finger
People out here saying "Taxachusetts" like that's a bad thing lol!
Article says that the wealthy are "fleeing" Mass. Even if that is true, if we did this in every state then they wouldn't have anywhere to run to. Even if they fled the United States, more power too them. If they don't want to help fund this country then they don't need to use its services.
Who knew that taxes aren't the devil?
Let's see how this plays out.
what so bold about taxing people fairly to run your state better?
It is almost as if the rich were the real burden on the state...
Moving the goalpost is a bold strategy.
"Meanwhile, overall state revenue collections are falling short of expectations, despite the new money from the millionaire's tax.
State finance analysts point to larger macroeconomic trends, like a drop-off in the purchasing of durable goods and a slowdown in hiring."
Government Intervention 101, unfortunatly. Where's that econ graph of this exact thing?