Fact Check: Misleading Claims in No on 1 Ad Called Out by Question 1 Supporters

Sep 13, 2022

Billionaires Funding Fear-Mongering Campaign Against Fair Share Amendment

BOSTON – Supporters of the Fair Share Amendment, the proposed state tax on incomes above $1 million that would raise billions of dollars to invest in transportation and public education, today called out several misleading claims in a new ad by the billionaire-funded campaign opposing the Amendment, which is Question 1 on the November ballot.

“A few billionaire CEOs who don’t want to pay their fair share in taxes are funding a campaign that misleads voters about Question 1,” said Jeron Mariani, Campaign Manager for Fair Share for Massachusetts. “But our campaign – thousands of educators, workers, small business owners, parents, faith leaders, municipal officials, drivers and transit riders, and neighbors all across the state – is ready to counter their scare tactics one conversation at a time.”

Here are the misleading claims in the No on 1 campaign’s ad:

They Say: “Question 1 would nearly double the income tax rate on tens of thousands of small businesses owners, family farmers, and homeowners.”

The Facts: Question 1 would fix Massachusetts’ unfair tax system by creating a 4% tax on the portion of a person’s annual income above $1 million. Any income under $1 million in a single year wouldn’t be affected, and just the portion above $1 million would be taxed more: an additional four cents for every dollar of annual income above $1 million.

In 2019, just 0.6 percent of all households in Massachusetts had incomes over $1 million. Less than 1 percent of Massachusetts taxpayers would pay more with Question 1, and those earning just over $1 million in a single year would only pay a little more. Not “nearly double.”

The Facts: Question 1 is a tax on personal income over $1 million – business taxes would not be affected. Less than 3 percent of businesses owners in Massachusetts have taxable personal income over $1 million that would be subject to Question 1, and many of them are primarily investors or shareholders, not people running a business day-to-day.

“If a business is generating more than a million dollars in personal profit for the owner, even after they deduct all their business expenses, let’s be real: it’s not a small business, and that super-rich business owner can afford to pay their fair share in taxes,” said Gerly Adrien, Business Director of Fair Share for Massachusetts & owner of Tipping Cow Ice Cream in Somerville and Boston.

They Say: “Politicians aren't just taxing annual salaries, it would also tax the sale of small businesses and homes in Massachusetts.”

The Facts: When a property or business is sold, only the gain in value, not the sale price, is subject to income tax. Last year, less than 1 percent of home sales in the state generated enough of a gain to be affected by Question 1. Just 895 homes, to be exact.

And no one pays taxes on the entire gain from a property or business sale. Home sellers can deduct up to $500,000 from their taxes on the sale of their primary residence, and deduct the entire cost of a renovated kitchen, an updated heating system, a new roof, or any other improvements. Businesses can deduct various capital improvements and equipment purchases. Only a tiny percentage of home or business sellers would see their taxable income rise above $1 million.

“As a retiree and homeowner, I know that Question 1 won't affect me and my wife when we sell our home. It makes me angry that the billionaire opponents of Question 1 are trying to scare us with misleading ads,” said John Lippitt, a Reading homeowner and retiree. “I’m supporting Question 1 because 99% of us, including home sellers and retirees, won’t pay more, but we'll all benefit from better roads and bridges, and our grandkids will enjoy better schools and affordable public college.”

They Say: “Politicians are pushing a tax hike on the November ballot.”

The Facts: The campaign for the Fair Share Amendment is led by the Raise Up Massachusetts coalition of community organizations, faith-based groups, and labor unions, not by ‘politicians.’ The Amendment was written in 2015 by the Raise Up Massachusetts coalition, and more than 150,000 Massachusetts voters signed petitions to put it on the ballot. Question 1 is backed by thousands of educators, workers, small business owners, parents, faith leaders, municipal officials, drivers and transit riders, and more than 300 organizations across the state.

“When I go door to door talking to voters about Question 1, I’m joined by educators, parents, and school staff who want our schools to have adequate staffing to give students one-on-one attention and help them recover from learning loss,” said Liz Speakman, a Quincy parent and Regional Field Organizer with Fair Share for Massachusetts. “I’m joined by drivers who want to see the potholes on our main streets fixed, bus riders who are worried about the state of our public transportation infrastructure, and students who want to get a public college degree without taking on enormous debt. That’s who our campaign is, and I know that when working people join together and have conversations with our neighbors, we can overcome the scare tactics of a few billionaires.”

They Say: The No on 1 ad originally listed five top contributors: Suffolk Construction, Sandra and Paul Edgerley, Jim Davis and Rand-Whitney Countainerboard. Then, a day later, it was updated to list Suffolk Construction, Sandra Edgerley, Jim Davis, Phill Gross, and Rand-Whitney Countainerboard.

The Facts: New filings with the state’s Office of Campaign and Political Finance (OCPF) show that the No on 1 campaign has raised more than $9 million, with more than $5 million coming from just five wealthy families. Three Massachusetts billionaires contributed at least $1 million each through corporate donations that prevent the true donor’s name from appearing in the ad disclosure: John Fish, Robert Kraft, and Rob Hale. Billionaire Jim Davis gave another $1 million, and multi-millionaires Paul and Sandra Edgerley gave another $1 million collectively. The rest of the campaign’s funding comes from a small number of other wealthy CEOs and financial investors, some of whom gave through their companies instead of in their own names.

“It’s day two of the billionaire-funded ad campaign opposing Question 1, and they’re already having trouble keeping track of which billionaires are bankrolling their campaign,” said Jeron Mariani, Campaign Manager for Fair Share for Massachusetts. “Voters shouldn’t be fooled by donations being routed through out-of-state corporations or through multiple companies; the opposition to Question 1 is driven by a small number of the wealthiest people in Massachusetts who would rather spend millions scaring voters than pay their fair share.”

Background on Question 1: the Fair Share Amendment

The Fair Share Amendment – Question 1 on the November ballot – will allow Massachusetts to improve our transportation and public education systems by making the very rich pay their fair share. Question 1 would create a 4 percent tax on the portion of a person’s annual income above $1 million and constitutionally dedicate the funds to be spent on transportation and public education. Only people who earn more than $1 million annually will be impacted; 99% of us won’t pay a penny more. And we’ll all benefit from better schools, roads, bridges, and public transportation.

Thousands of educators, workers, small business owners, parents, faith leaders, municipal officials, drivers and transit riders, and more than 340 organizations across the state are working together to pass Question 1. Our campaign has been endorsed by 80 labor unions, 63 community organizing groups, 15 faith-based groups, more than 50 businesses, and more than 100 other social service and not-for-profit organizations focused on housing, education, transportation, public health, and the environment. Learn more and get involved at FairShareMA.com

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The Fair Share for Massachusetts campaign is led by Raise Up Massachusetts, a coalition of community organizations, faith-based groups, and labor unions committed to building an economy that invests in families, gives everyone the opportunity to succeed, and creates broadly shared prosperity. Since our coalition came together in 2013, we have nearly doubled wages for hundreds of thousands of working people by winning two increases in the state’s minimum wage, won best-in-the-nation earned sick time and paid family and medical leave benefits for workers and their families, and started to build an economy that works for all of us, not just those at the top.