Massachusetts Question 1, Tax on Income Above $1 Million for Education and Transportation Amendment (2022)

Massachusetts Question 1 was a ballot measure that gained national attention during the 2022 midterm elections. The amendment proposed creating an additional tax on high earners to generate revenue for education and transportation in the state. After contentious campaigning and millions spent on advertising, Question 1 ultimately passed with over 52% of the vote.

Background

Attempts to raise taxes to increase education funding have a long history in Massachusetts. In 2018, a similar initiative was kept off the ballot due to procedural issues. With education issues exacerbated by the COVID-19 pandemic, supporters renewed efforts to provide additional revenue through Question 1.

The context of the measure centered around insufficient education funding in the state. Massachusetts has historically ranked near the bottom for per-pupil spending compared to other states. Supporters argued new revenue was needed to adequately invest in schools, colleges, and universities.

Details of Question 1

The amendment specifically proposed an additional 4% income tax on earnings over $1 million per year. This would be on top of the state’s existing flat income tax rate of 5%. Therefore, the total tax rate for income over $1 million would be 9%.

Furthermore, the $1 million income threshold would be adjusted annually based on the cost of living, similar to federal income tax brackets.

Revenue generated from the new tax would be dedicated to public education, public colleges/universities, and the repair/maintenance of roads, bridges, and public transportation.

Finally, the higher tax rate would go into effect on January 1, 2023. This started the process of generating the additional revenue supporters argued was greatly needed.

Campaigns

Both supporters and opponents of Question 1 invested heavily in their respective campaigns to influence voters. Each side made their case through advertising, media appearances, and grassroots organizing.

Supporters

• Arguments: Proponents focused their messaging on the need for more education funding, which the new tax could provide without raising taxes on middle and low income families. Supporters said Question 1 advanced principles of fairness and making the wealthy pay their share.
• Funding: The main group backing Question 1 was Fair Share for Massachusetts. In total, supporters raised over $31 million to promote the ballot measure.
• Key Groups: Progressive organizations such as Raise Up Massachusetts mobilized support among members and volunteers. Teacher unions also advocated in favor of Question 1.

Opponents

• Arguments: Detractors characterized the measure as an excessive tax hike that would hurt small business owners and job creators. Opponents said the new revenue would amount to a “blank check” for unchecked government spending.
• Funding: A coalition of business groups joined forces to oppose Question 1 and campaign against it. They raised around $15 million to fight the ballot measure.
• Key Groups: The Massachusetts High Technology Council argued the tax increase would hinder the state’s innovative economy. Other critics included Massachusetts Fiscal Alliance and the Massachusetts Taxpayers Foundation.

Results

When votes were counted on November 8th, Question 1 emerged victorious, albeit narrowly.

• The ballot measure was approved with 52.26% voting yes. The margin was fairly close, with under 200,000 votes separating the opposing sides.
• An analysis of results showed Question 1 performed well in more liberal parts of Massachusetts like Boston, but lagged behind in conservative rural areas.

Implications

Now that it has passed, Question 1 will have major budgetary and policy implications for Massachusetts.

• Economists project the new tax could generate around $1.3 billion annually in additional state revenue. This represents a significant influx of funding that supporters argue is crucial for education and infrastructure.
• Specifically, the money will expand investments into public schools, state colleges/universities, transportation projects, and road/bridge repairs. Supporters say this will improve educational outcomes and mobility statewide.
• Passage of Question 1 could motivate further attempts to raise taxes among progressive advocates and Democratic lawmakers in the state legislature. However, the close margin suggests future tax increases will continue facing strong opposition.

Conclusion

Massachusetts Question 1 was one of the most contentious and expensive ballot initiatives of the 2022 election cycle. After a hard-fought campaign between supporters and opponents, voters approved creating an additional tax on high earners to fund education and transportation needs across the state. While critics decry the measure as an excessive tax hike, proponents now have a mandate to push for greater investments in public education and infrastructure funding in Massachusetts.

FAQ

How much revenue will Question 1 raise?

Economists estimate the additional 4% tax on income over $1 million will generate around $1.3 billion in new revenue annually for Massachusetts.

When did the tax go into effect?

The higher 9% tax rate for earnings over $1 million went into effect on January 1, 2023. This marked the start of revenue generation from Question 1.

How will the new revenue be used?

The amendment requires funds raised to be spent on public education, public colleges/universities, transportation, and infrastructure projects like fixing roads and bridges.

Who supported Question 1?

Teachers unions, progressive advocacy groups, and Democratic lawmakers were among the key supporters. Fair Share Massachusetts led the main campaign.

Who opposed Question 1?

Business organizations, anti-tax groups, and conservatives opposed the measure. The Massachusetts High Technology Council argued it would hurt the state’s economy.