Our much-maligned legislature has its fingers to the wind, and approved the blindingly popular Fair Share initiative onto the 2018 ballot.
Supporters, who have dubbed the measure the Fair Share Amendment, say it would raise an extra $1.9 billion each year that could only be spent on “quality public education, affordable public colleges and universities, and the repair and maintenance of roads, bridges, and public transportation.”
Meanwhile our also-unassailably-popular governor won’t come out and say it straightforwardly … but he’s basically agin it. Because he starts, continues, and apparently ends with the proposition that people are taxed enough — including the wealthy who have seen their tax burden decrease over the last generation. (More here.)
Under the circumstances — our regressive tax structure in Massachusetts, chronic underinvestment in transportation, and the plain desirability and successful track record of investment in public education — Baker’s is not a “moderate” position. It’s dogmatic, even Norquistian. (Even our small-c conservative Speaker DeLeo supported the Fair Share.)
The Mass. Taxpayers Foundation has even trotted out the argument that we’ll create well-heeled tax refugees and therefore fail to realize the benefit. This may seem hard to believe: Why wouldn’t folks have already moved to NH? Why aren’t Wellesley and Wayland already ghost towns? MTF does a little calculation based on 300 well-off people leaving … but I’m a bit baffled as to how they arrived at that number.
And indeed Mass. Budget and Policy Center points to a review of studies, saying this effect is extremely minimal. After all, if you’re wealthy, don’t you need to be near the economic and educational networks that create that wealth? And — if you’re a big-picture, enlightened thinker — wouldn’t you want to strengthen those networks with better infrastructure and education? The wealthy of Massachusetts aren’t here in spite of past investments in those areas; they’re here because of them. They’re not going anywhere.
MTF points to Connecticut as an example where raising taxes supposedly cause businesses to leave the state, notably hedge funds, GE et al. Well … different places are different. Our tax base is not overly dependent on a vaporous financial industry with a nominal physical presence. We have universities with smart people, and the universities aren’t going to up and leave. And GE got a tax benefit, but probably didn’t even need it to move here.
Now, MTF does make a couple of interesting points: One, that revenues are inherently volatile, and tax policy ought not to be engraved into the Constitution but left to the legislature and Governor to adjust as necessary. I’d agree — but I’d extend that to the ban on progressive taxation written into the Constitution currently, article 44. That’s the inflexibility we’re chafing against right now. They also point out that it’s possible to gain some progressivity to the tax code without altering the Constitution, by increasing the nominal income tax rate but increasing exemptions for lower income earners. This has been floated by progressives before: An Act To Invest would have raised the income tax to 5.95% but increased the personal exemption from $4,400 to $7,900. (Whether this actually passes Constitutional muster itself is another story.)
What would the most preferable path be? To repeal Article 44, lower the regressive sales tax and institute a progressive income tax — which has failed countless times in the past. The cause endures. The dream will never die.
But things don’t always work linearly. Sometimes the legislature intercepts a ballot initiative and takes its own action. The Fair Share Amendment looks like a juggernaut for now. Increasing taxes on the wealthy is extremely popular, and widely recognized as necessary. Could the legislature pass something like the Act to Invest, partially obviating the need for a Constitutional amendment?