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The 'but what about the poor millionaires' club lost in Massachusetts on Tuesday [1]
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Date: 2022-11-10
The money from the new tax, some $2 billion a year, will be dedicated to transportation and education. That means improving public transit across the state, fixing the state’s nearly 500 structurally deficient bridges, repaving roads, and fully funding schools. It means expanding pre-K programs and vocational schools that currently don't have room for everyone who wants to attend. Massachusetts will be able to do so much with this money.
But as the 48% of people who voted against a tax that will only ever be paid for even one year by 0.7% of people show, there are plenty of people out there who will stand up for multimillionaires and billionaires.
The biggest group making a fuss on social media are concern trolls just worried that this means the state will lose out because all the wealthy people will leave.
x I can hear the wealthy packing their bags to spend their 183 days in FL — m caserta (@michaelcaserta2) November 9, 2022
In fact, sociologist Cristobal Young has studied this issue in depth, finding in one study (coauthored with Charles Varner, Ithai Z. Lurie, and Richard Prisinzano) that “a 10 percent increase in the top tax rate leads to a 1 percent loss of the millionaire population.” Another study by Young and Varner looked at the tax flight outcome after New Jersey passed a millionaire tax, once again finding very small effects confined largely to retired millionaires, millionaires living on investments, and millionaires who both live and work in the same state. Young and Lurie have also looked at the outcomes of the 2017 Republican tax law. Here’s why that law might have created millionaire tax flight from blue states:
x The 2017 Trump tax bill (TCJA) was a tax cut for the rich. But it also /raised/ taxes on the rich in blue states
Mostly, it redistributed income from the “blue state rich” to the “red state rich” #SALTcap
It dramatically shifted tax burdens, depending on where the rich live pic.twitter.com/wJeM4h5buz — Cristobal Young (@cristobalyoung5) July 29, 2022
But:
x The Trump tax bill had zero effect on migration rates
Graph shows mig rates by income (from $0 to $5 million+) before and after the tax reform
A classic “nothing burger”
Rich people have low migration, and become embedded in the places where they find success pic.twitter.com/3IVT72nYbM — Cristobal Young (@cristobalyoung5) July 29, 2022
Sure, it’s possible to find occasional examples, but the idea that large numbers of rich people are going to pack up and flee is a myth.
Fearmongering about home sales was another of the major angles opponents of the Fair Share Amendment pushed. Because what if you sell your house and suddenly get hit with an extra tax? Well, if that happened, it was because you sold your house for well over $1 million more than you paid for it to begin with, because only the gain would be eligible for taxation. In fact, people selling their primary residence would also get to deduct $500,000, so only the amount over the first $1.5 million of the sale past what they originally paid for the house would be taxed by that extra 4%. Oh, and add in any major renovations they did—the cost of that new roof or renovated kitchen would also be deductible. That’s why, even in a state with expensive housing, less than 1% of home sales would be affected. That’s not stopping people from pushing those claims, though:
x Now show the blue collar family that bought a 3 family 30 years ago and will have the state bend them over a barrel when it’s time for their sound investment to pay off. If you wanted to be communists & tax Kraft & other billionaires the tax should have started at 10 million — Kevin Mahoney (@KevinMa87546138) November 10, 2022
Look, if that “blue collar family” that had the money to buy a three-family unit in 1992 saw well over $1 million in growth on their investment, they’re going to be fine! Because they’re getting that first million over what they paid in 1992 with no added tax. Plus they’ve presumably spent 30 years collecting rent on two of those units, or else housing their relatives for free.
Then there’s this old chestnut:
x Hell no, it also taxes small business owners, farmers and fishermen. That’s a sure fire way to increase our food costs, materials and home heating oil. — Son of the South (@xviidigit) November 9, 2022
Let me fix that for you: “Small business owners making more than $1 million of personal income a year, farmers making more than $1 million a year, and fishermen making more than $1 million a year.”
x Feeling bad for these small farmers & fishermen who were strongly opposed to Question 1 🥲 pic.twitter.com/FaqJy5cKv5 — Grace Holley (@hollley) November 9, 2022
Massachusetts activists are absolutely going to have to hold our legislature accountable for how this money is spent, specifically. What transportation projects? Which schools? But while the fight continues to build a more equitable commonwealth with stronger education and infrastructure, this first win was essential.
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[1] Url:
https://www.dailykos.com/stories/2022/11/10/2135073/-A-lot-of-people-say-they-favor-taxing-the-rich-Massachusetts-voters-went-to-the-polls-and-did-it
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