Oct 17, 2022
Analysis of IRS Data Shows Only a Tiny Percentage of Retirees Have Annual Taxable Income of More Than $1 Million
BOSTON – A new report from the Massachusetts Budget and Policy Center, based on Massachusetts taxpayer data from the IRS, proves conclusively that less than 1 percent of seniors will pay more in taxes if Question 1 on the November ballot is approved by voters. The campaign working to pass Question 1, the proposed state tax on incomes above $1 million that would raise billions of dollars that are constitutionally dedicated to transportation and public education, released the following statement in response: “This report irrefutably confirms that the vast majority of Massachusetts seniors won’t pay a single cent more with Question 1,” said Fair Share for Massachusetts Campaign Manager Jeron Mariani. “Not when they take money from their retirement savings, and not when they sell their home. Only the richest 1 percent in our state will pay more, and we’ll all benefit from better roads and schools, for us and for future generations.” Last week, the Yes on 1 campaign launched a new TV ad featuring John Lippitt, a Reading homeowner and retiree, explaining how “Question 1 raises $2 billion a year for public education and roads. It turns out, only people making over a million dollars a year will pay more, and it won’t impact our retirement savings. Even when we sell our house, we won’t have to pay more. I’m voting YES on Question 1.” “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 Lippitt at the time. “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.” The Massachusetts Budget and Policy Center report found that:
Only 0.8 percent of Massachusetts taxpayers aged 60 and older have an annual income of $1 million or more, high enough to be affected by Question 1.
Less than 1 percent of Massachusetts tax filers receiving taxable distributions from individual retirement accounts had taxable income that totaled over $1 million.
Just over half of one percent of Massachusetts tax filers with income from taxable pensions or annuities had taxable income that totaled over $1 million.
Even seniors with high wealth generally have much lower annual incomes than their wealth. Question 1 only affects personal income over $1 million in a single year, not wealth held in a retirement account or other assets.
Another recent report found that even in Massachusetts’s hot housing market, only a tiny percentage of home sellers would see their taxable income rise above $1 million. Last year, only 895 homes, less than 1 percent of all home sales in the state, generated enough of a gain to be affected by Question 1. That's because it's the gain in value since the house was originally purchased, not the full sales price, that is subject to income tax. Plus, home sellers can deduct up to $500,000 from their taxes on the sale of their primary residence, and also deduct the entire cost of a renovated kitchen, an updated heating system, a new roof, or any other major improvements. Local data on home sales shows that in the majority of towns across the Commonwealth, not a single home was sold for a gain of $1 million or more. Only 22 towns had more than 10 sales yield a gain of $1.5 million or more, enough to be affected by Question 1 after deductions are taken. 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 500 organizations across the state are working together to pass Question 1. Our campaign has been endorsed by 87 labor unions; 72 community organizing groups; 18 faith-based groups; more than 75 businesses; 62 city councils, select boards, and school committees; 89 local Democratic town and ward committees; and 115 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. ### 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.