Voters in California and Massachusetts last week decided the fate of proposed taxes on each state’s wealthiest residents, called by some a “millionaire tax.” The additional revenue would provide some benefit for transportation purposes.
Dubbed the Fair Share Amendment, Question 1 on the Massachusetts statewide ballot called for revising the state constitution to create an additional tax of 4% for household income above $1 million.
Voters approved the question by a margin of 52% to 48%.
The state already has a 5% flat-rate income tax. Passage of Question 1 will result in the tax rate increasing to 9% for the state’s wealthiest residents.
An estimated $1.2 billion annually will be applied for public education, roads and bridges, and public transit.
Advocates said that tapping the state’s richest to help others will benefit everyone. Critics countered that a millionaire tax could result in some of the state’s wealthiest residents leaving the state, which they point out would place a bigger financial burden on those responsible for paying the tax who remain.
Opponents added that the state does not have a revenue problem. They said the problem is with how the state spends its existing revenue.
Voters in the Golden State rejected adding a tax on the state’s wealthiest residents to help address greenhouse gas emissions.
Passage of Proposition 30 on the statewide ballot would have resulted in the personal income tax above $2 million increasing by 1.75%.
The tax was estimated to raise between $1.3 billion and $3 billion yearly.
Nearly half of all revenue – 45% – would have been used for rebates and other incentives for zero-emission vehicle purchases. Another 35% would have been applied for electric vehicle charging stations. Additionally, wildfire suppression and prevention programs would have collected another 20%.
The question was rejected with 58.6% in opposition to the tax and only 41.4% in favor.
Support and opposition
Advocates said that action is needed in California to mitigate the threat of climate change, including the reduction of vehicle emissions.
Supporters included ride-hailing company Lyft. A 2020 state air pollution regulation mandates that companies that include Uber and Lyft must use zero-emission vehicles for 90% of their miles driven by 2030.
Critics included Gov. Gavin Newsom. The governor signed an executive order two years ago to ban the sale of new fuel-powered vehicles in the state starting in 2035.
The Democratic governor had referred to the ballot question as “a cynical scheme by a single corporation to funnel state income tax revenue to their company.”
California Republicans also opposed the targeted tax. LL