Legal challenge argues the proposal is unconstitutional, not to mention economy-stifling.
NFIB/MA has joined with several other business groups in a legal effort to block the millionaire’s tax ballot initiative, backed by Raise Up Massachusetts, from appearing on the November 2018 ballot.
If approved by voters, the state’s constitution would be amended to impose an additional 4 percent surtax on incomes over $1 million. For small business owners, the majority of whom are structured as pass-through entities—which pay taxes on their business income at the personal rate—this would be a major hit. The millionaire’s tax proposal received a spot on the ballot after gaining approval from lawmakers in two successive legislative sessions.
Revenue generated by the tax is purportedly dedicated to the state’s education and transportation funds, but the constitution prohibits ballot initiatives making specific appropriations, a key point in the legal challenge to the initiative. The legal complaint also argues that this constitutional amendment would eliminate future lawmakers’ ability to adjust the tax rate or direct revenue to other funding priorities without amending the constitution.
Aside from Christopher Carlozzi, NFIB/MA State Director, other plaintiffs in the lawsuit are Christopher Anderson, President of the Massachusetts High Technology Council, Richard Lord, president and CEO of Associated Industries of Massachusetts; Eileen McAnenny, president of the Massachusetts Taxpayers Foundation; and Daniel O’Connell, president and CEO of the Massachusetts Competitive Partnership and former top aide to Gov. Deval Patrick.
There’s no current schedule for when the state Supreme Judicial Court will hear the lawsuit.