Massachusetts Votes for Millionaires Tax

Why would a state with more than sufficient revenue from taxes increase taxes for millionaires? If you’re a millionaire in the US, instead of being rewarded for your enterprise; you’re being used as a punchbag. With every punch swung with misplaced anger. Before we cover the recent developments in Massachusetts, let us reassure our American readers that there are ways to save on taxes in the USA without renouncing your citizenship.

Massachusetts Says Yes

Tuesday, November 8, was the day Massachusetts voters voted yes on Ballot Question 1, resulting in a 4% surtax on Massachusetts taxpayers with a net income exceeding $1 million. This has become known as the millionaires tax. It becomes fully operational on January 1, 2023, when the state’s constitution is amended to add four percentage points to the state’s income tax for yearly revenue above $1 million.

In 2022, Massachusetts has a flat income tax rate of 5% (except a 12% rate applied to short-term capital gains and collectible gains), irrespective of how much income the taxpayer earns. Question 1 was the sixth attempt since 1915 to upgrade the Massachusetts tax system from a flat rate to progressive rates enforcing higher rates on more significant earners. With the passing of Question 1, Article XLIV of the Massachusetts Constitution will be updated to incorporate the following:

“To provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes.”

“In addition to the taxes on income otherwise authorized under this Article, there shall be an additional tax of 4 percent on that portion of annual taxable income over $1,000,000 (one million dollars) reported on any return related to those taxes.”

“To ensure that this additional tax continues to apply only to the commonwealth’s highest income taxpayers, this $1,000,000 (one million dollars) income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets. This paragraph shall apply to all tax years beginning on or after January 1, 2023.”