The Need for a Millionaires Tax in Massachusetts

Oscar Kim Bauman, Scarlet Staff

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Teachers and other workers here in Massachusetts are struggling; and tax reforms to ensure millionaires pay their fair share could help fix that. On April 11th, workers, politicians, and labor advocates testified before the Massachusetts State Legislature Revenue Committee to support a proposed tax on millionaires.

Revenue from this proposal, which would raise the income tax for households making over $1 million a year by 4%, would be used to fill funding gaps in struggling sectors like education and transportation. According to State Representative Jason Lewis, a Democrat from Winchester, the proposal would apply to around 14,000 Massachusetts households, and would bring in an additional $2 billion annually.

A 2015 report by the Massachusetts Foundation Budget Review Commission found that the state underfunds public education by over $1 billion each year, and that the districts most adversely affected are overwhelmingly those which have more low-income students, students in special education programs, and students in English as a second language programs.

While disadvantaged students struggle, the rich are getting richer. Recent changes to the American tax code championed by President Trump cut the top tax rate for individual income from 39.6% to 37%. These rates are historically low.

Under the Eisenhower administration, the top marginal rate was 91%. Under Kennedy and Johnson, it was 70%, a return to which was proposed earlier this year by New York Congresswoman Alexandria Ocasio-Cortez, a Democratic rising star. Even Reagan’s dramatic tax cuts only initially brought the rate to 50%.

Common objections to taxing the rich are often based in a simple misunderstanding or misrepresentation of tax brackets. A marginal tax rate of 70% on those earning over $10 million

annually, as proposed by Congresswoman Ocasio-Cortez, would not apply to the entirety of an individual’s income, as dishonestly represented by pundits on the right. Rather, it would  simply tax the individual’s income over that $10 million threshold.

In spite of this widespread misinformation, most Americans understand the moral necessity of taxing the rich. A 2017 poll conducted by CBS found that 56% of voters nationwide favor the idea of raising taxes on the wealthy. More recently, a 2018 WBUR poll found 77% support in Massachusetts for the millionaires tax.

Another argument against taxing the rich posits that, if people are able to become successful and prosperous, they ought to be able to enjoy the full extent of that prosperity. This idea is hollow on two counts. Firstly, a tax hike on the rich would simply cost them a small amount of their income, not reduce them into paupers; in fact they would still enjoy more money than most of us can dream of.

The second argument is a moral one. To quote Massachusetts’ senior senator, presidential candidate Elizabeth Warren, “There is nobody in this country who got rich on his own — nobody…You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.”

In short, the rich are only able to become rich because of the labor of working people, and are only able to be successful because of taxpayer-funded necessities. As wealthy people grow more successful, they ought to give back to the systems which enabled their success in the first place. To starve the systems which have aided you once you no longer need them is nothing short of selfish and uncaring, the epitome of the “screw you, I got mine” mentality.

Massachusetts is, according to 24/7 Wall St, the fourth richest state in the nation by per capita income. This state’s tax policies ought use these resources well, rather than allow schoolchildren to go without adequate education and workers to go without reliable public transportation while their rich neighbors just get richer.