If Raise Up Massachusetts and other supporters prevail, a ‘millionaire’s tax’ ballot initiative will go on the ballot this November. However, the issue is currently held up in court, where NFIB/MA, the Massachusetts High Technology Council, and other business groups have filed a lawsuit to block the measure from going before voters.
Under the proposal, if it appears on the ballot and is approved by Massachusetts voters, the state constitution would be amended to impose a 4 percent surtax on incomes over $1 million. This would significantly impact small business owners, the majority of whom are structured as pass-through entities and pay their business income taxes at the personal rate.
While the measure was approved by lawmakers in two successive legislative sessions, NFIB/MA and fellow litigants argue that it’s unconstitutional because the state constitution prohibits initiative petitions from being used to embed spending earmarks in the constitution. Because revenue generated from the tax surcharge is intended to fund education and transportation, it could be in violation of this rule.