I love that the main criticism is that this will cause the ultra wealthy to leave the state. That just seems like a reason to implement this nationwide rather than at the state level.
What, the people who buy elections are fleeing? Sign me up for that.
I mean, an eroding tax base is a problem. I just think the solution is to drag them kicking and screaming to pay back into the system that enabled them to become so stinking rich rather than chasing them off/eating them. The Guillotine of the first French Republic sure did feel good until the reign of terror rolled in.
Murder is always fun until you’re the one getting murdered. Doesn’t apparently sour you on the idea of murder, though.
Eat the rich and become what you despise. No thanks. I’m happy to look for that third way
If you took my comment as an endorsement of how the First republic did things, it you read it wrong.
Wow, yeah, that was a bad read lol. It’s generally received wisdom for global economics that tax disincentives push people to a point, but most of 'em will actually pay taxes if the alternative is hanging out in Bermuda forever. Nationwide rather than statewide is gonna be good enough for most
Tl;Dr basically agree
but most of 'em will actually pay taxes if the alternative is hanging out in Bermuda forever.
What if the alternative is their money hanging out in Bermuda forever while they enjoy a life of tax-reduced luxury in the countries they’re dodging taxes from?
Then you have to continually fight a lot of battles about your money and it gets complicated but sure that’s definitely a thing people also do and there are no magic bullets and all options for everything are a bit sucky - but having some of these mega-high-earners pay a bit more tax is still better than doing nothing because you’re worried they’ll take the money away, and the wider the policy of fair graduated tax is applied, the better it works
Time to put some sanctions on tax havens then
I didn’t take it that way— mine was a poorly worded agreement with you.
Murder is always fun until you’re the one getting murdered.
You think…murder is always fun?
A dusting of sarcasm on that.
It’s probably not…always…fun…
What’s your third way? Does shore leather taste good?
Technically the people who buy elections via Campaign Funding and Political Endorsement are almost never actually in the state they’re buying the elections of. Reminds me of The Southern Strategy, when Republicans invested heavily in the south to stoke the flames after LBJ signed the Civil Rights Act.
I remember seeing this argument about billionaires and corporations leaving the US if they are taxed fairly at a national level. If that were the case then 1. The US wouldn’t lose out on revenue it wasn’t losing out on already, and 2. The “free market” or the government would adapt to fill the abandoned niche.
And anyplace worth living already has a higher tax rate anyway.
Massachusetts was already relatively high tax, high cost of living
Besides we would all be better off if people like that left. Human happiness levels off around 110k per year, on average in the US. If there really are people who would give up all the things that make normal people happy just to add a marginal amount to their net worth, do we really want them?
We have all unfortunately met someone like this. Someone who cuts the line at an all you can eat buffet. All the food you could possibly want and they are angry that someone else might possibly get slightly more of something. And that isn’t fair. Someone who has a fake job with almost no work and tries to find ways out of that even token tasks.
Let them leave.
Source on the 110k number? Because I remember reading something about 75k not that long ago and inflation couldn’t have been that bad could it?
Examples?
Western Europe
The average US rate is 25% while the average Western Europe rate is below 20%….
They even get more out of those taxes too.
You are looking at two different tax systems. The effective US tax rate (the rate you actually pay is much much less). Our household makes $300k per year, and we have a $650k net worth. Our income taxes every year? Less than 7% of that, which is absurdly low. The ultra wealthy are taxed even less than that. The US is propped up by taxes from the middle-class because the more you makes, the easier it becomes to optimize and lower your effective tax rate. We need to tax the rich more.
Ok, now what’s the top tax bracket? We’re talking about people making >$1M/yr.
10% $0 to $11,000.
12% $11,001 to $44,725.
22% $44,726 to $95,375.
24% $95,376 to $182,100.
32% $182,101 to $231,250.
35% $231,251 to $578,125.
37% $578,126 or more.
If you make $579k, you don’t pay 37% of that. You pay the above rate for each range of dollars you earn. So everyone pays 10% on the first $11k they earn.
There’s also deductions including the standard deduction of $13,850 (so subtract that from what you earned)
Some good information: https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
They aren’t paying the highest marginal tax rates, that’s what the loopholes are for. Trusts are well known for this exact scenario.
Neither of those numbers seems accurate. It’s not the “average” rate payer who is supposedly being chased off.
California. Highest taxes in the US, yet we generate 14.2% of the country’s GDP despite being 11.7% of the population. We have an economy the size Germany (who has the world’s 4th largest economy) with 46.4% the population.
People talk shit about the state, how awful it is, etc, and while we do have many problems we’re doing pretty damn well all things considered. If we get housing and healthcare fixed (both active efforts by our government) we’ll be in an amazing position as a state.
California is weird like that. I’ve seen plenty of sentiments about California surviving standalone as its own nation.
Without doing any research, most of us assume the revenue and economy is based on key industries like tech, agriculture?
Would the states survive if it didn’t have his current water supply for agriculture?
With the Exodus of some tech companies, what is that trend look like overall? If it continues, will the state still be in the same good shape?
I’m assuming the great weather has something to do with it?
There are already places (in the U.S. and other countries entirely) with far, far lower taxes than MA. Why haven’t rich people moved already?
Yea except I’m sure our federal government would just blow it on more missles and bullets. At least here it’s doing good things like feeding kids.
Fun fact! Where do you think those missiles are designed? It’s not all universities in Boston.
Even if it’s not implemented nation wide, there’s the implication that the state is losing something by these people leaving. I suspect they’re contributing little by being there though.
I mean, if they leave, that tax revenue drops, meaning the goodies you gained may have to be dropped. The concern is whether it is sustainable long term
What tax revenue drops? Before the change they weren’t paying the additional tax, and now they aren’t paying it if they leave, so nothing is lost on that account. The state loses whatever taxes they were paying originally; given that they’re annoyed enough to leave over an increase that suggests that they were already finding ways to minimize their tax payments. Thus, by them leaving, the state is likely losing a small amount of revenue. Given that each person has a cost to the state, the net effect will be even smaller.
Surely there’s a point at which taxes drive away enough people that it doesn’t work, but it’s clearly not the case for this particular implementation.
I don’t know what the tax bracket earning for this scenario is. I wonder what the difference is between the extra money a person earning a million dollars a year would be under this new tax guideline, versus the amount they were paying before. Now what’s the difference if they leave in state revenue?
Even that fear is not really supported by data, according to Cristobal Young’s The Myth of Millionaire Tax Flight.
What are you trying to show?
You didn’t have to make $1,000,000 per year to buy a $600,000 house.
That the median house price in MA is 38% higher than the median US house price, suggesting that the wealthy aren’t fucking off.
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I voted for this. There was a lot of outright blatant lies on the commercials against this.
I forgot it even passed until my kid started kindergarten in the fall and during registration we were told starting that year all school lunches are free.
This is what you get when you curbstomp conservatives at the polls:
P R O G R E S S
If they want to leave then good riddance. If you aren’t willing to contribute to society then go live on a deserted island.
They tried this before with the Minerva Reefs. It was, in fact, not their land to take and they folded like a folding chair. Google it.
my favorite part about reading the relevant Wikipedia article is the libertarian magazine claiming the islands were “more or less reclaimed by the sea”. As if the people already there weren’t people but fish or something. For those curious: Here is the Wikipedia article
That was a good read. I am glad that Tonga was not only able to stand up for their claim of the reef, but also at one point fend off those dirtbags.
I’m an international student in MA, I remember getting SMS spam telling me to vote against it since it is aimed against retired people and veterans. Don’t ask me how
Because there’s probably a significant number of affected rich folks who are retirees, vets, or both. Though, the propane you saw insinuates that it’s the other way around - that a significant number of retirees and vets would be targeted by the new law. It’s a pretty common tactic used against dumb people who can’t tell the difference. Good on you for seeing through it.
“Think of the veterans!” is almost as ubiquitous as “think of the children!” in terms of political propaganda, and there are areas of Mass that are basically retirement communities and rich people’s summer houses (often at the same time). Convincing grandma and grandpa that the government is coming for their retirement funds is an easy way to get them to vote against their interests, and in some places they make up the majority of voters.
Fun fact, here in eastern Mass we refer to the wealthy summer folk as “snow birds” because they migrate south to Florida during the fall and migrate back north at the end of spring. There’s some very red areas of Mass because of these people, as they only care about keeping the taxes on their summer homes low and don’t care at all about the communities that their houses are in.
This appears to be a tax on regular income, but I thought that very rich people set up their finances so that their income appeared as carried interest, capital gains, etc. Are those subject to this tax?
According to this article I found, capital gains count as income for Massachusetts state taxes:
Edit: just realized the bank I linked to lol
Capital gains is always taxed at your normal bracket for holdings less than a year old and fall under special long term brackets for holdings >1 year. Those brackets are much smaller than income.
Capital gains isn’t the issue. The issue is people taking out loans against their securities or other assets at often very affordable rates (until recently). Those loans are their income, the interest on those loans are deductible and they never have to sell their assets.
As long as interest paid is lower than taxes on capital gains the behavior will never shift.
For readers who want to learn more:
https://smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes
I heard about it last year on a podcast. It’s apparently very common among the ultra wealthy.
The tax is on all taxable income not just regular wage income. Capital gains and carried interest are taxable income. They are subject to the tax if they make over the $1mil annually.
Capital gains are taxed less than regular wage income. Max capital gain rate is 20% while the max wage income tax rate is 37%.
About fucking time now the feds should do the other 49 states. But we all know that will never happen.
Progressive states could! Fed states, on the other hand, are still grappling with whether or not women are considered people.
Yeah, but the billionaires don’t really want to live in the shitholes. It’ll be a dilemma for them.
I’d think they’d wanna move to the shithole states that have people voting against taxing them because they would have an easier time getting them all to believe anything they say.
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Tax them until they wanna move to Mexico… see if they prefer paying taxes over loosing a finger 🤘. Sometimes the kid nappers send a finger. If you don’t pay they send the rest of the body in installments. But paying taxes is too burdensome I suppose.
Billionaire named finger
People out here saying “Taxachusetts” like that’s a bad thing lol!
Article says that the wealthy are “fleeing” Mass. Even if that is true, if we did this in every state then they wouldn’t have anywhere to run to. Even if they fled the United States, more power too them. If they don’t want to help fund this country then they don’t need to use its services.
Who knew that taxes aren’t the devil?
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Let’s see how this plays out.
Moving the goalpost is a bold strategy.
what so bold about taxing people fairly to run your state better?
It is almost as if the rich were the real burden on the state…
"Meanwhile, overall state revenue collections are falling short of expectations, despite the new money from the millionaire’s tax.
State finance analysts point to larger macroeconomic trends, like a drop-off in the purchasing of durable goods and a slowdown in hiring."
Government Intervention 101, unfortunatly. Where’s that econ graph of this exact thing?
Crazy that a millionaire tax in MA could cause this trend countrywide. Just crazy. /s
This is a well known econ effect. When you tax something, markets become less efficient
Cool. We would like less millionaires and billionaires hoarding wealth until the minimum standard of living in America isn’t homelessness and food insecurity. So why is it a bad thing to tax the hoarding of wealth?
This trickle down shit hasn’t worked in 40 years, restore the tax rates to before that started fucking up our country, give them the incentive to pay their employees rather than the government.
What’s going to happen if tax rate increases keep decreasing revenue?
The top tax rate bracket in the US was over 90% from 1944-1963. A median single income worker could own a home, have healthcare, food, and afford kids. GDP was doing just fine, I assume that’s what you mean by revenue.
The top tax rate now is 37%, and a median single income earner can sometimes afford a 1 bedroom without relying on a 2nd set of income. Can’t afford buying a home. Food scarcity is getting worse. Healthcare is fucked beyond belief. And kids are just flat out of the question.
As a country we aren’t getting our fair share of the value of our labor. Ideally the benevolent job creators would create good paying jobs, and make the middle class stop struggling. When this doesn’t happen, we need to give them an incentive. I’m not saying we should increase taxes, unless there is no other option.
What ideas besides taxes do you have to make the billionaire class give us a minimum standard of living that isn’t dystopian?
The price of rent is caused by wildly popular limits on construction of new housing.
“The top tax rate bracket in the US was over 90% from 1944-1963.”
Discussing this without mentioning the ridiculous loop holes is either ignorance or bad faith. And I don’t care for either.
The loop holes exist today too. But sure, let’s ignore that.
What do you have in mind to eliminate the disparity in wealth that plagues us, reducing the American standard of living to subsistence and poverty? I’m sure ya have one, right?
Tax rates that reduce revenue are far, far greater than any current tax rate in the US, not that rates should be set to optimize revenue. People that try to use the Laffer curve as justification for reducing taxes in the US lack both practical and theoretical understanding of taxes.
I was referring to this, not the laffer graph
So when you asked “What’s going to happen if tax rate increases keep decreasing revenue?” you were referring to something that doesn’t involve revenue? And that doesn’t have to do with income tax? In a conversation about income tax? That’s even worse.
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Larger macroeconomic trends means that the trends are countrywide so your point kind of completely fails.
