MassCPAs Opposes Ballot Question 1

On behalf of 11,000 members of the Massachusetts Society of CPAs (MassCPAs), we oppose Ballot Question 1, the proposed constitutional amendment that would establish an additional 4% state income tax on income over $1 million.  

Our members likely have different beliefs about whether, conceptually, a graduated income tax is a good idea or not, but the approach laid out in Q1 is unacceptable. Tax rates and thresholds have no business in the state constitution and tax policy should be based on sound principles, not marketing approaches.  Proponents of the ballot question claim that the tax increase will only impact “those who can afford it” and that the increase will be used to fund education and transportation.  Neither one of these precepts is true.  Many of the “millionaires” that will be impacted are one-time millionaires who are selling small businesses or homes they have invested in over a lifetime and were counting on to fund their retirements.  

Voters should not envision a tax on wealthy individuals who earn over a million dollars year after year, they should envision a tax on people’s homes, their businesses and their retirement nest eggs.  As for funding transportation and education, there are no guarantees or guardrails to ensure that happens. The only guarantee based on how the amendment is written, is the money will instead go into the general fund where the Legislature ultimately decides where and how that money is spent.  

Amending the Massachusetts Constitution comes with extremely high risks, even more so when it comes to mandating new taxes on a swath of taxpayers. Question 1 leaves no legislative or administrative recourse should the proposed tax have an outsized negative impact on the Commonwealth’s economic output and competitive edge. Simply put, it would take a minimum of four years to reverse or amend all the damage imposed by Question 1.  

We also have concerns about the taxpayer response to this policy, especially during this transformative time in our society and economy. It has never been easier for individuals and businesses to relocate with minimal disruption to their personal and professional lives. In fact, in a recent survey, 73% of MassCPAs members reported they will be even more likely to recommend their clients consider a change in domicile if Question 1 passes. This is not just advised for the ultra-wealthy, but for small business owners and other potential one-time millionaires that would be impacted by this law.  

There are many worthy discussions necessary to make the Massachusetts tax code fairer and more equitable for individuals and businesses across the Commonwealth. Question 1 does not accomplish that endeavor.  

We oppose Question 1 for these reasons, and we urge you to do the same.