Within the past couple of years, the nation has had some eye-opening experiences due to the COVID-19 pandemic.
The pandemic has highlighted huge gaps in the financial and economic statuses of its citizens. With the rising cost of goods and stagnant wages, many are left wondering how to address these issues and how do we come up with the financial means to act on those solutions.
One of the solutions presented in the state of Massachusetts is the Fair Share Amendment scheduled to be on this year’s state ballot. Today, Massachusetts residents can vote to add an additional 4% tax on individuals making over a million dollars in income in a year. Unlike the federal income tax rates that exponentially increase based on the amount of income a person earns, Massachusetts residents and workers all pay a flat rate of 5% on their income regardless of whether they earn $10,000 a year or $1 million.
The proposed tax increase will only apply to the amount of income that exceeds $1 million. This means if someone makes $1.5 million in a year, they will only pay additional taxes on $500,000. If the amendment passes, it will directly affect less than 1% of Massachusetts residents but will have a profound impact on everyone living and working in the state.
The Fair Share Amendment is estimated to generate $2 billion a year in revenue for the state and will be codified into the state constitution to be used only for education and infrastructure. This means there’s a guaranteed investment in our public schools, roads and transportation systems.
It’s fair to say that if you are not part of the top 0.6% making more than a million dollars a year, you would most likely support this amendment. Many City Councils in the region have come out publicly in full support of the Fair Share Amendment including, Lawrence, Fall River, Holyoke, Lynn, Malden, New Bedford, Newburyport, Pittsfield, Springfield and Worcester. The hope is that voters in Lowell will also follow suit.
The city recently implemented a 5.5% increase on property taxes which disproportionately impacts low- to moderate-income households to bolster the city’s budget. Lowell residents didn’t have a say in the City Council’s decision to approve that increase, but this proposal will have minimal financial implications on some of the wealthiest residents in the state and folks will have a voice using their vote.
One can only speculate as to why any voter would be hesitant to support a motion that would generate billions in revenue for the state of Massachusetts and bring millions of dollars in funding to invest in cities like Lowell and across the state that are in dire need of drastic improvements.
It is apparent to anyone walking or driving around town that the city of Lowell has neglected to make necessary repairs to their bridges, roadways and public schools for years resulting in huge monetary expenditures, decreased efficacy and overall quality of life for local taxpayers.
Some might say the amendment is not perfect, that the rich shouldn’t be punished for being wealthy but it’s not a punishment when what they pay in taxes can easily come back to them in just a short span of time either through investments and earnings.
Others say there should be more discussions on how, when, and where these funds should be spent, but waiting to iron out all these details leaves many folks wondering when any action will take place.
At least it’s a starting point for change, and for a city like Lowell it could make all the difference.