The Board of Directors of the Corridor 9/495 Regional Chamber of Commerce opposes Question 1 on the November 2022 ballot.
The proposed Constitutional Amendment would create an additional 4% Tax on all forms of income in excess of $1 million, increasing the rate from the current 5% up to 9%. This is an 80% tax increase and imposes one of the largest tax hikes in Massachusetts history.
If Question 1 were to pass, the income tax surcharge impacts not just those that are perceived to be the “wealthy” but also small business owners and retirees. As we all know, small business owners are the risk takers and entrepreneurs creating jobs and supporting our communities. They have worked hard for years or decades to build their nest eggs and depend on their retirement investments. They do not regularly have incomes exceeding $1 million, but would be subject to the increased tax when that are selling a business or seniors selling their home and assets to fund retirements.
Proponents of this tax increase assert that all tax revenue generated from the tax hike will go towards education and transportation spending. The Chamber has always recognized the value of investing in education and transportation, however, the ballot question’s text plainly states that its funds are “subject to appropriation” and doesn’t guarantee more spending on those initiatives.
Currently, the state has $4 billion in tax surpluses, a healthy reserve in the Stabilization Fund of almost $7 billion, and billions of dollars in federal monies at their disposal. The need to permanently raise $1-2 billion dollars in new taxes is not compelling at a time when Massachusetts has a huge surplus in tax revenues.
The Chamber is also concerned about how this tax hike may discourage people from moving here or opening a business in Massachusetts. The tax hike would make Massachusetts less competitive with other states at a time when our tax environment is already among the least competitive in the country.
As small business continues to navigate the Covid-19 pandemic and deal with inflation and supply chain difficulties, this is not a time to pass tax hikes that will hurt tens of thousands of small business owners and retirees.
Karen Chapman
President/CEO
Corridor 9/495 Regional Chamber of Commerce
