Massachusetts and California Propose ‘Millionaire Tax’ Proposals

C. Heslop

Nationwide, there have been a lot of tax cuts. But a different route is under review in two states. In California, Proposition 30 would add a 1.75% levy on annual income over $2 million. It would get added to the state’s top income tax rate of 13.3%. (source)

The Fair Share Amendment in Massachusetts would create a 4% levy on yearly income above $1 million. This percentage is on top of the state’s 5% flat income tax. (source)

The states will debate the new tax proposals in November. If approved, the new rates would come into effect in January 2023. (source)

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Progressive Tax Massachusetts

“Massachusetts has been talking about creating a progressive tax rate for a long time,” said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center, noting the current flat income tax is 5% regardless of income. “Part of this is they want that ability to shift some of the overall state’s tax burden up the ladder,” he said. (source)

Progressive Tax California

“California already has very high top marginal [tax] rates,” Walczak said. “Even if voters are broadly in favor of progressive taxes and support higher rates on high earners, they may feel that it goes far enough.” “You can’t read much into what voters want based merely on ballot access,” he added. (source)

The Fed has similar proposals on the books. But these have not received any traction. Several of these federal bills have floated around parliament. But did not receive support or signature approvals. (source)

If passed, how would these two states spend the revenue? Massachusetts expects to generate $1.3 billion from the measure in 2023. The money would go towards public education, roads, bridges, and public transportation. California projects the proposal would bring in $3.5 to $5 billion annually. It would use the money to fund zero-emissions vehicle programs and wildfire response and prevention. (source)

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*Disclaimer: This article is for informational purposes only. This article got written using accredited media reports. *Advice Disclaimer: This article should not be considered professional delinquency, debt management, money, life choice, tax, financial advice, or legal advice. The ideas, numbers, and strategies should never be used without first assessing your own personal and financial situation, or without consulting a life coach or financial professional.

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