State Lawmakers Advance Income Surtax on Wealthy

  • Chief Court Officer Paul Dooley led senators to the House Chamber for a joint session Wednesday where the branches set up the income surtax for a June debate. Contributed Photo/Sam Doran, State House News Service—

State House News Service
Published: 5/10/2019 9:24:47 AM
Modified: 5/10/2019 9:24:35 AM

BOSTON — House and Senate Democratic leaders look to be sitting on a comfortable cushion of support for a revived constitutional amendment to increase taxes on the wealthy, easily advancing a "millionaires tax" proposal on Wednesday, and making plans to debate it next month.

The House and Senate gathered in a Constitutional Convention on Wednesday to consider proposed amendments to the state's constitution, including another attempt to let voters decide whether to impose a higher tax on household income over $1 million.

The so-called "millionaires tax," which was opposed by business groups and knocked off the ballot by the Supreme Judicial Court last summer, was advanced on an overwhelming and mostly partisan procedural vote.

The 156 votes to advance the proposal were considerably more than the 101 that will be required in June for the Legislature to agree to the measure, and could forecast an easy glide path.

"I think we're in pretty good shape," said Rep. James O'Day, who filed the constitutional amendment. O'Day predicted that with the new legislators in the House and Senate the margin could be higher than the last time the Legislature voted in 2017 and the amendment got 134 votes.

Senate President Karen Spilka and Speaker Robert DeLeo said it will be debated on June 12, when Spilka said members will also have an opportunity to offer and debate amendments. The vote expected at that time will be the first of two votes in consecutive sessions needed to put the question on the 2022 ballot.

"I think it's important to many of the legislators and the residents of the commonwealth to put this on the ballot and get it there," Spilka said.

SHNS Video: Spilka on income surtax

O'Day and Sen. Jason Lewis both filed identical proposals to tax income over $1 million at an additional 4 percent, generating as much as $2 billion in additional revenue for the state that would be directed toward transportation and education needs.

The Legislature advanced O'Day's amendment (H 86) to third reading on a 156-37 vote, but only after Democratic leaders tried to move it forward on a voice vote. The House voted 121-33 in favor, while the Senate vote was 35-4. Rep. Colleen Garry of Dracut was the only Democrat to vote against moving the proposal forward, and Sen. Patrick O'Connor of Weymouth was the only Republican to support it.

Rep. Brad Jones, who forced the roll call vote, was visibly frustrated on the floor, and afterward lashed out Spilka and Democratic leaders, who he said blocked him from filing an amendment.

Spilka, who presides over the Constitutional Convention, seemed to be trying to quickly gavel through several votes she intended for the day, when Jones and Rep. Brad Hill both rose to question a voice vote to suspend the rules to consider the "millionaires tax" proposal.

Before they said anything, Spilka conferred with the Senate clerk and told the two Republicans they were too late. Both men sat down, but Spilka then recognized Senate Minority Leader Bruce Tarr, who doubted the vote and was allowed to request a roll call, for which there wasn't enough support.

"You know what it is? You can quote me. It's bullshit. That's what it is," Jones told the News Service later about Spilka not recongizing him to speak.

The North Reading Republican said he wanted to offer an amendment, but was denied the opportunity. His amendment, he said, would have proposed to ensure that money raised from the wealth tax be spent in addition to funds already directed toward education and transportation, and not simply replace those funds.

Jones filed a similar amendment in 2016, and it failed.

"I wanted to debate that today. But today was all about ramming it through because they wanted to get the tax train moving," Jones said.

The Republican leader did not try after his first attempt to offer the amendment again, though he was recognized a second time when he doubted a voice vote and requested a roll call on ordering the bill to a third reading.

"I'm going to file it as soon as I possibly can if they allow amendments," Jones said. "I have a healthy mistrust and I think that mistrust was validated today."

Spilka indicated that the House and Senate would consider an order at some point in advance of the June 12 debate establishing a process for amendments to be filed.

"I don't think we'll see a ton of amendments," O'Day said. "I do believe that the business community will probably try to turn up the heat a little bit over the next several weeks and see if they can't get a few more members to move their position."

The Massachusetts High Technology Council, one of the groups that successfully petitioned the SJC to throw the proposed 4 percent surtax on income above $1 million off last year's ballot, told lawmakers in a new round of letters this week that the proposed amendment puts "a misplaced emphasis on revenue-centric solutions and offer[s] hollow promises of increased state investment."

Opponents have also expressed concern that it would harm small business owners and drive wealthy residents out of state. Christopher Carlozzi, state director of the National Federation of Independent Businesses, said many small business owners sell their company for retirement, and now would pay a 9.05 percent tax on much of that "nest egg."

"The proponents of this initiative claim they are targeting high-income earners, but small, independent, entrepreneurs and main street businesses would be hit by this tax surcharge. About 75 percent of all businesses, mostly smaller ones, pay their business taxes through their personal income tax filings, making them subject to this tax even if they are just middle-income earners," Carlozzi said.

O'Day said that even if the lobbying efforts intensify, he's not worried about losing the support the amendment needs.

"I think knowing the needs that we have in our commonwealth relative to education, the education foundation, transportation, infrastructure and what this is designed to do is really funnel this money toward those issues, so with that in mind we'll be fine," O'Day said.

The court last summer threw out the citizen's initiative petition because they ruled it unlawfully commingled topics by raising a tax, and also directing money to be spent on education and transportation. Democrats have gotten around that rule this year by having legislators, who are not bound by the same restrictions, file the petition directly.

Voters have rejected past attempts over the decades to amend the constitution to allow for a graduated income tax, rather than a flat tax, but this current proposal has polled strongly.

Massachusetts Fiscal Alliance spokesman Paul Craney said his group continues to stand with the voters who have rejected graduated income taxes.

"Some lawmakers think history started in 2019, but this policy idea is the most rejected in the state’s history. The answer should always be NO, when considering removing our constitutionally protected guarantees of equal taxation," Craney said.


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