An organization that holds considerable sway on Beacon Hill and among the state’s business community on Tuesday reaffirmed its longstanding opposition to the income surtax amendment that will appear on this November’s statewide ballot.
The Greater Boston Chamber of Commerce said the idea of changing the state’s tax structure to charge a higher rate on annual household income above $1 million to raise money ostensibly for transportation projects and education is “ill-conceived and deceptive.”
The surtax proposal would shift the state away from the flat income tax rate structure enshrined in the Massachusetts Constitution. If the amendment is approved by voters, the first $1 million of annual household income would still be taxed at the current 5 percent tax rate, and income above that first $1 million would be taxed at an effective rate of 9 percent.
“Massachusetts already ranks 49th in the country in the cost of doing business,” Chamber President and CEO James Rooney said. “Question 1 would increase taxes on tens of thousands of small business owners at a time when we should be supporting our small business owners as they work to rebuild from the detrimental impacts of the pandemic. This is an unprecedented and unnecessary financial hit to our hardworking residents.”
Surtax supporters emphasize that the surtax does not apply to a company’s revenue, only to annual household income above the $1 million threshold, which could include gains realized from the sale of a small business.
Opponents add that it could also apply to small businesses organized as S-corporations and pass-through entities that report business revenue as personal income.
The so-called Millionaire’sTax is deeply unpopular within the business community and many in the business community have spent years arguing that abandoning the state’s flat income tax structure would make Massachusetts less competitive and less attractive to growing businesses.
The Greater Boston Chamber of Commerce not only opposes the surtax, but this spring also filed a brief in the lawsuit unsuccessfully challenging the summary of the constitutional amendment and description of a ‘yes’ vote that is to be provided to voters on the November ballot.