Amicus brief filed against Massachusetts’ proposed ‘Millionaire’s Tax’

An amicus brief filed Monday morning takes aim at Massachusetts’s proposed “Millionaire’s Tax.”

Fiscal Alliance Foundation announced that the case of Christopher Anderson et al. v. Maura Healey, William F. Galvin, and Jose Encarnacion, Deborah Frontierro, Nazia Ashraful, Meg Wheeler, John M. Kyriakis, Ziba Cranmer, Keith Barnard, and Kayda Ortiz has been filed in Massachusetts Supreme Judicial Court.

According to the release, oral arguments in the case will be heard on May 4. The Foundation, represented by Michael Williams of Lawson & Weitzen in Boston, expects a decision in June.

At the heart of the litigation is the proposed referendum on the Nov. 8 ballot where voters will have the opportunity to vote “yes” or “no” on a proposed 4% surtax on income beyond $1 million, a release reads. Under state law, there is a 5% flat tax imposed on all income. The passage of the referendum would represent an 80% increase in taxes on those million-dollar earners, according to Beacon Hill Institute.

Court documents cite the ballot question as ambiguous, with money raised from the surtax being appropriated for public education and transportation. The Foundation claims the legislature could raise or reduce funding through an “earmark” for those two entities, which could lead to money not being spent where the proposed Constitutional amendment intends.

Beacon Hill Institute in its brief calls the earmark “a false promise.” The Institute projects the state spending $14.2 billion on education and transportation next year while the tax would bring in an additional $1.9 billion in new revenue. If ratified, the amendment would raise spending to $16.1 billion and that money could “go elsewhere” or the funding could “reduce, or rise, expenditures” on schools and roads, the Institute says.

“Earmarking revenues from state income taxes through a Constitutional amendment is not a reliable path to increased spending on education and transportation,” David G. Tuerck, president of the Beacon Hill Institute and one of the authors of the amicus brief, said in the release. “The earmarking of revenues from an income tax risks a decision by the Legislature to use the new revenues to replace money already allocated to the earmarked purposes, with no gain in spending for those purposes.”

Tuerck also said that in order for voters to make a sound decision, “accurate information on the consequences of their vote” should be addressed “including the downside.”

Paul Diego Craney, spokesman for the Fiscal Alliance Foundation, said this issue has been noted since the question was formulated.

“Earmarking new tax dollars for a specific purpose does not guarantee an increase in funding for those purposes,” Craney said in the release. “In fact, there is a lot of evidence that points to the opposite usually happening, and this brief does a good job laying out concrete examples of that to the court.”

If approved by voters, the surtax would go into effect Jan. 1.

This article was originally posted on Amicus brief filed against Massachusetts’ proposed ‘Millionaire’s Tax’