Oct 21, 2022
This November, Massachusetts voters will consider the Fair Share Amendment through ballot Question 1: a proposed tax on incomes over $1 million to fund education and transportation. As CEO of a Massachusetts technology company with thousands of employees, I see this proposed amendment as an opportunity to increase our state’s talent pool, improve the transportation system our workers depend on, and distribute the tax burden more fairly.
Approval of Question 1 would create an additional 4% tax on the portion of a person’s annual income above $1 million, and constitutionally dedicate the funds to education and transportation. It seeks to address two problems that have bedeviled Massachusetts for years: our regressive tax structure and the resulting inadequate investment in education and transportation.
Question 1’s proposed adjustment to our tax system would more fairly distribute the costs of critical public services. Today, someone making under $20,000 pays about 10% of their income in state and local taxes, including income, sales, excise, and real estate taxes. Most people in the middle class pay 8% to 9%. But those earning more than $1 million a year pay an average of just 6.8%.
Unlike Massachusetts, most states have a graduated income tax, where rates increase as income increases. Our current tax system disproportionately burdens low- and middle-income people. With Question 1, the highest-income earners will pay a share of their income toward state and local taxes that is closer to the share of income that others pay, approximately 8.7%. Question 1 is a chance to balance the scales and ensure that the most fortunate among us pay our fair share to invest in the underpinnings of a strong state economy.
In Massachusetts, we have both some of the best school systems and some of the worst. Public schools in Boston, Lawrence, and Springfield are woefully inadequate, in part because they need to deal with the effects of poverty on their students. We can’t just wish them better. It will require real money to fix them. Having gone through public schools in another state, I know that good public schools help move low-income students towards a better life. We are failing many Massachusetts students today, and that ends up costing all of us.If we truly want to support diversity, equity, and inclusion, investing in improving our public schools in poor communities — which are often racially, ethnically, and linguistically diverse — is one of the best ways to do so. And that’s not just the right thing to do; it’s good for business and good for our economy, which depends on a well-educated workforce.
In addition to a strong public education system, businesses in Massachusetts also rely on a functioning transportation system to get employees to work and goods to market. Additional funding will help repair our state’s backlog of crumbling roads and public transportation infrastructure.
With Question 1 approved, Massachusetts would still have a top tax rate lower than New York, California, New Jersey, Hawaii, Oregon, Iowa, and Minnesota, and similar to the top rates in DC, Maryland, and Vermont. Numerous studies show that these places have not experienced negative economic effects from out-migration of multi-millionaires. In fact, they have been able to invest in public goods like education and transportation that strengthen their economies.This amendment will increase fairness; strengthen the foundations of our economy, including our workforce; and benefit communities across the state. In the long run, this will benefit all of us.
Mohamad Ali is the Chief Executive Officer of IDG.