This November, Massachusetts voters have a once-in-a-generation opportunity to make significant investments in our public schools and public transportation infrastructure. For us in the real estate community, it’s also a chance to support the housing needs of our workforce.
Question 1 would create a 4 percent tax on the portion of a person’s annual income above $1 million and require that the funds be spent only on transportation and public education.
As a real estate and housing development professional, as well as a member of the Alliance for Business Leadership, here’s why I support Question 1: The fundamentals of Massachusetts’ economy are strong, but that prosperity isn’t reaching all of our residents. Our education system isn’t meeting the needs of all students and families, and our transportation system certainly isn’t meeting the needs of commuters and businesses.
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At the center of this inequitable economy is our state’s housing crisis. We don’t have enough affordable housing in the places where residents want to live.
Meeting our state’s housing needs can’t be done only by building more in the places that are already attracting development today. We also need to invest in and make more accessible those areas of the state where more affordable and attainable housing currently exists. This includes places like the state’s 26, state-designated Gateway Cities. Investing in transportation connectivity and education with Question 1 will help expand the opportunity for more growth and development in places like these and in all parts of the state.
Transportation is a service that links where people live to where they work. Investing in its future is as relevant to housing as it is to jobs. Question 1 will help repair our state’s enormous backlog of neglected and structurally deficient bridges, roads and public transportation infrastructure, and help fund new public transportation infrastructure to connect people to better job opportunities to wherever they live.
As we recover from the COVID-19 pandemic, Question 1 will also allow us to make investments in our public schools to help students get back on track and to increase access to state-of-the-art vocational education to tackle our state’s workforce challenges. And with new revenue from Question 1, we can make our public colleges more affordable, so students can graduate without the burden of enormous debt.
Investing in transportation and public education is good for municipalities and the residents they serve. Good schools and transportation infrastructure are major drivers of property values, as anyone building in a well-funded school district or near an MBTA station can tell you.
And for Massachusetts to stay economically competitive, we need to maintain our well-educated workforce and fix our congested transportation system. That’s why the Alliance for Business Leadership, a coalition of individual and corporate leaders who believe that social responsibility and economic growth go hand-in-hand, is also supporting Question 1.
Income Taxed Is Actually Small
Question 1 would only raise taxes on the top 1 percent of Massachusetts households: those who earn more than $1 million in a single year. And the tax only applies to the amount of their income over $1 million. A person who earns exactly $1 million won’t pay anything more, and a person who earns $1.1 million would pay an extra 4 percent only on the amount over $1 million – just $4,000 extra. Ninety percent of the funds raised would come from those who earn more than $2 million in a single year.
And only 1 percent of homes in Massachusetts sell for enough to be affected by Question 1; just 895 of the 100,000 homes sold last year sold for a capital gain of $1.5 million or more, enough to trigger the tax after common tax deductions! That’s because home sellers can deduct up to $500,000 from their taxes on the sale of their primary residence, and deduct the entire cost of a renovated kitchen, an updated heating system, a new roof or any other improvements.
The bottom line: The only individuals who will pay more, including business owners, shareholders or home sellers, are those who earn more than $1 million in personal taxable income in a single year.
And because Question 1 would be written into the state constitution, the state legislature would be constitutionally required to spend this new money on transportation and public education. This spending requirement would be constitutionally protected and could only be undone by a vote of the people.
As real estate leaders, we know how to recognize a great opportunity when we see one. With the Fair Share Amendment, we ensure that Massachusetts supports the needs of our workforce and can invest in things like new school buildings, support for our educators, safer roads and bridges, affordable public college, access to vocational education, fast and reliable public transportation and pre-kindergarten classrooms for every child.
That’s an opportunity we can all get behind.
Susan Gittelman is the executive director of B’nai B’rith Housing, a nonprofit affordable housing developer currently working in Boston, Metrowest and the North Shore, and a supporter of the Yes on 1 campaign.