State lawmakers approve tax on top earners for 2018 ballot
Could a tax on the rich be the political kryptonite that weakens Charlie Baker’s seemingly invincible status as one of the most popular governors in the country? Some Democrats seem to think so.
Lawmakers on Wednesday voted to place a constitutional amendment calling for the so-called millionaire’s tax on the 2018 ballot, and Democrats immediately pounced on the issue as a political weapon that could be wielded against Baker and other Republicans running for state office next year.
Early polling has found that more than two-thirds of voters support the amendment, which would increase taxes on earnings above $1 million and direct the money to transportation and education. A WBUR poll in January indicated even a slim majority of Republicans would vote for the tax.
Such broad support for the measure could give Democrats an opening to depict Baker, who has declined to take a firm stand on the issue, as an ally of the wealthy, a tactic they hope will begin to deflate his sky-high popularity.
“It sets a significant platform for us: do you stand for the middle class or not?” said Gus Bickford, chairman of the Massachusetts Democratic Party. “That’s what this question is about.”
But Republicans, in turn, hope to defuse the potential political land mine by portraying the amendment as yet another attempt by Democrats to increase the state’s tax burden and drive away businesses.
“It’s hard to imagine something more predictable than the chairman of the Democratic Party calling for tax increases,” said Terry MacCormack, a spokesman for the state Republican Party. “Instead of going back to taxpayers with their hands out once again, Massachusetts Democrats should start by joining Governor Baker in leading a state government that lives within its means.”
The amendment, backed by labor, religious, and community groups, would scrap the state’s flat income tax rate of 5.1 percent and create a two-tiered system. Starting in 2019, earnings over $1 million would be taxed at a rate 4 percentage points higher.
State officials say about 19,600 people, or 0.5 percent of all filers in Massachusetts, would pay the higher tax, which would raise about $2 billion annually.
Backers say the money must be spent on transportation and education, although opponents assert the language in the amendment is not binding and that lawmakers could spend the revenue on other uses.
So far, Baker has sounded cool to the amendment, without taking a concrete stance.
“Governor Baker does not support tax increases on our hard-working families, and was pleased to sign a balanced budget last year that reflects the administration’s priorities to create better communities, schools, and jobs with no new taxes,” said his spokeswoman, Lizzy Guyton, in a statement Wednesday.
Peter Ubertaccio, a Stonehill College political scientist, said under normal circumstances voters might not think twice about a Republican governor opposing a tax increase. But Massachusetts has faced repeated budget gaps and one Wall Street rating agency recently downgraded the state’s creditworthiness. The budget problems indicate that state leaders will need to either cut spending or increase taxes to balance the budget, he said.
“It puts the governor in a tight spot,” he said. “I’m not sure it’s necessarily fatal.”
Baker, after all, was rated the nation’s most poplar governor, with a 75 percent approval rating in an April survey by Morning Consult.
The Legislature’s vote to place the amendment on the ballot could also increase pressure on Baker to take a stand. The vote was 134 to 55.
“Today, Governor Baker has an opportunity to get off the sidelines and lead,” Jay Gonzalez and Bob Massie, two Democrats running for governor, said in a joint statement Wednesday.
Mayor Setti Warren of Newton, another Democratic candidate for governor, also seized on the issue, saying supporters of the amendment “must prepare to defeat Governor Baker on this question.”
But the issue may not be so clear-cut. Voters in Massachusetts, who have a history of electing Democratic legislators and Republican governors, could choose to support the tax and then reelect Baker to oversee the new revenue and ensure it is spent wisely.
House minority leader Bradley H. Jones Jr., a North Reading Republican, said even if the amendment is ratified, there is no guarantee it will lead to an additional $2 billion for education and transportation because lawmakers could simply shift money to other priorities or pet projects.
“Do you really trust Democrats on Beacon Hill?” he said. “Look at the track record.”
Business groups have threatened to challenge the amendment in court, asserting it violates the Legislature’s constitutional power to make spending decisions. If they were to file a successful lawsuit, it could knock the amendment off the ballot, derailing it as a political issue for Democrats. Lawyers who drafted the amendment say they’re confident the measure passes constitutional muster.
The amendment, supporters said, simply asks the wealthiest residents to pay a higher tax to improve schools, make public higher education more affordable, and maintain and repair the state’s crumbling roads and rails.
“Everybody knows, in this current system, the wealthy are doing extremely well, and that’s not a problem,” Bickford said. “But we need to have them pay their fair share.”