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Massachusetts is flush with cash, possibly reshaping debate over proposed millionaires tax

Massachusetts is flush with cash, possibly reshaping debate over proposed millionaires tax

The state has more than $5 billion in unpaid federal stimulus dollars to spread to its residents. At least $8 billion in aid is coming from the US government to help the state improve roads, bolster transit, and counter climate change. The states tax receipts are well ahead of expectations.

For Massachusetts, the heady fiscal times also complicate a question that voters set to ask the November 2022 election: Should Massachusetts pay taxes on its wealthiest residents to make a wealthier state a billions more?

The proposed proposition, which would layer a surcharge of annual income above $1 million, will land on the ballot in 2022, years after it first appeared in an era of mounting needs for the school and transportation system of Massachusetts and in a time of financial uncertainty for the state.

The yawning and anticipated billion-dollar of several years ago, however, have been replaced by an unexpected budget surplus, a state emergency savings account whose momentum has reached a record 4.6 billion dollars, and several billion-dollar buckets of federal aid that lawmakers say can bring generational change to Massachusetts.

There have been a lot of controversy under the intense debate between labor unions and activists whose needs will greatly outstrip state's current financial good fortune and business leaders who caution a hike tax in taxes on the wealthy could unnecessarily undercut the state's competitiveness.

And it's really a whole new world, but I don't know how much money I can afford in future. The state isn't desperately looking for money as I can hardly afford to pay off the cash.

The so-called millionaires tax will impose a 4-percent surtax on monthly personal income above $1 million. According to the state analysis now six years old, the measure could generate anywhere between $1.6 and $2.2 billion in revenue each year, though opponents argue the estimates.

The fair share amendment could inject equity into what they describe as an unfair flat tax rate set at five percent.

What we envisioned was the fact that the hunger pandemic never increased?

The United States has not missed the crisis, but now in a private sand and a newfound and unexpected resources have ceased. Legislative leaders are still negotiating the facts of a program pulling the most from $3.8 billion Federal American Rescue Plan Act aid and a $1.5 billion state surplus.

As an economist and professor at the University of North Carolina, a trend that sets the state up to most certainly see a surplus by June.

I think people will feel the idea of times being good, as far as taxes go, he said.

The billionaires tax is intended to exploit the lack of capital as an engine of the economy.

The partisans of the tax proposal say the federal aid can help start a variety of projects, but rather it does not replace a long-term tax increase.

Several officials also question how far infrastructure bill funding can ultimately go. The jury is out if it is going to be truly transformational, said Senator Sonia Chang-Daz, who sworn in as governor of Jamaica Plain.

Those who don't want to pay for that will use what we are trying to do now and make an argument, Gee whiz, the Fair Share Amendment really isn't necessary now, said Rep. John ODay. He led the amendment.

The Fair Share amendment is not a sprint, it's annually. It's not just benefit to our families, to our communities, to our enterprises, to infrastructure. If you can give them money, we don't have to pay with us, then you can't afford that. An official says the Fair Share Amendment is only temporary, not in the two years youre under this pressure. We want to create an alternative, but it provides the ultimate solution.

This tax amendment restricts the state's ability to change the language while voters later want to repeal or amend the statute.

This process requires the elected legislature to pass two-year sessions of Congress on the constitution, so that the proposed proposal may only be passed to voters by the election. And it eventually means that it will take a year when the legislative legislature began to take care of the measure before the 2016 election.

The former president of the Massachusetts Taxpayers Foundation warns that the MBTA is staring down fiscal calamity in the coming years. The president suggested that state officials should instead consider raising the gas tax or hiking fees to address needs beyond federal aid.

Amending the Constitution to a tax doesn't make sense, she said.

Business leaders repeatedly challenged the proposition that money is intended to go toward education and transportation as promised, recognizing that it would technically be subject to appropriation a phrase that gives the Legislature some broad latitude for deciding on what would happen in the Legislature.

The Massachusetts High Technology Council sent a letter to attorney general Maura Healey and Secretary of State William F. Galvin asking that the description of the ballot measure passed by voters include a line stating that the Legislature could ultimately reduce its funding on education and transportation from other sources and simply replace it with the new surtax revenue.

The tax debate is likely to be viewed as running into other races on the 2022 ballot. Governor Charlie Baker who has opposed large-based tax increase and said that he's against the millionaires tax, has cast doubt on the proposals need given federal aid.

The second-term Republican, who has not yet said whether he would seek a third, has echoed business leaders in suggesting that the tax could push high earners out of Massachusetts. We should be very careful about what we think we could raise through that fair share tax, Baker told in September.

Geoff Diehl, a former state representative, opposes the proposal, which would he say has no negative impact on the economy.

He said that the federal aid bill only would address the initial hurdle in infrastructure, but instead would make it simpler for us to carry it. It dont mean you need to continue to have it, she said.

I think that he had a disagreement over Bakers incremental approach to governing. But the same with another Democratic senator lobbied for a state of New York, as in the past, whose views as shocked, sorry, a state senator was.

Those candidates who support the Fair Share Amendment need to ask our federal government to fund things that we consider priorities, said he.

The report was written by Jon Chesto of the Globe staff.

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