Mass. income tax cut ballot question faces legal threat
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Massachusetts voters may be asked this November to decide whether to cut the state income tax rate from 5% to 4%, a move that would have huge consequences for state spending.
- But a legal challenge heard Monday could pull the question from the ballot entirely.
Why it matters: The measure could cost the state $5.1 billion to $5.4 billion in annual lost revenue once fully implemented.
- That would dwarf the roughly $2 billion generated annually by the 2022 millionaires surtax.
Threat level: Opponents warn the shortfall would mean cuts to programs Democrats have recently introduced, like free school meals, community college programs and MBTA operating support.
Catch up quick: The "Massachusetts Decrease State Income Tax Rate to 4% Initiative" is a citizen-led ballot measure that would phase in a one-percentage-point reduction to the state's flat personal income tax rate over three years.
- It would drop to 4.67% in 2027, then 4.33% in 2028 and reach 4% in 2029.
Voters would be asked whether to permanently reduce the rate most workers, investors and retirees pay on taxable income.
- Proponents of the reduction say a median household would save roughly $1,230–$1,250 annually.
- Top earners, those who make more than $1.1 million a year, would save more than $11,000.
State of play: The Supreme Judicial Court heard oral arguments Monday in a challenge to the constitutionality of Attorney General Andrea Campbell's official ballot summary of the question.
- Plaintiffs argue the summary omits a wonky, but critical, detail: because long-term capital gains tax rates are pegged by law to the income tax rate, the measure would also reduce capital gains taxes.
- That would mean a significant benefit for high-income earners that the summary doesn't mention.
Justice Scott Kafker was pointed in his skepticism in oral argument Monday, saying the summary was "not great."
- He called the omission not just material, but a misrepresentation, and that a reasonable voter would assume capital gains were unaffected.
Between the lines: If the SJC rules against the summary, it could very likely disqualify the question so it never gets to the ballot.
What's next: Supporters face another signature gathering deadline July 8, with the general election on Nov. 3 — assuming the question gets that far.