Viewing a single comment thread. View all comments

modernhomeowner t1_itwr69j wrote

All people who would like to save themselves the trouble of leaving the state. If it passes, they will leave and take their tax payments with them, we'd get 0% rather than the 5% we are getting now, or the 6,7,8,9% we are told we will get if this passes. Rich people don't give up their money easily. They will move just a state away to keep their 5% rate or move to TN, TX, NV, FL or somewhere else with 0%.

−22

Yeti_Poet t1_itxgps7 wrote

Nah. This is just a fantasy. Or maybe more accurately, a meaningless threat.

If they cared that much, they could already be in one of the many states with no income tax at all. A shift from flat to progressive income tax is not going to drive the owner of Suffolk Construction to move to Texas.

23

modernhomeowner t1_itxiauh wrote

It's the push. You stick with your employer for $20 an hour, even if you can get $25 elsewhere. But, the employee tells you that you now have to come in Sundays too and now that's the push you need to apply elsewhere. It's not about what the rate is, it's the push for more that drives people away. Right now, yes, you can go to other states for less, but we are about the same as all our neighbors, so it doesn't seem bad. Now, raising taxes makes them rethink things. People will leave. It's how many is the question and what income level. One $10m earner leaving is the same loss as the new earnings on 125 people making $1.1M.

Where I used to live, all 4 billionaires in my area left after the state raised taxes, one moved his whole headquarters to Florida and took all their senior managers with him. One of them just hired a CEO and moved to Florida, it was cheaper than paying the taxes and he didn't have to work. One guy making $50M a year and moving to Florida costs MA $2.5M a year in lost revenue.

I'm more concerned about MA having the greatest revenue than the highest tax rate. Higher tax rates do not always create the highest tax revenue. I doubt we'll ever get the real data on how many people left, how many use a different state for investment income, or how many businesses were considering expanding to Boston from NYC to cut taxes and instead now choose FL or TX.

−7

Yeti_Poet t1_itxki78 wrote

We aren't about the same as our neighbors, we are lower than nearly all of them. And they have progressive tax structures. MA is coming in line with the region. New York's 10.9% at the top of their structure will still be higher than us. Vermont's 8.75% will be almost the same. Other neighboring states are around 7%. It's just flatly wrong to frame a 9% income tax as exorbitant or out of line for our region. I find it amusing that your last paragraph is you just saying "but of course I will never have evidence to support my claim."

But you do say you are worried about revenues. Are you genuinely suggesting that you think tax revenues will fall if this passes? That is what you are using as a frightening outcome here to try and persuade people to your side. You think the net effect will be LOWER tax revenues? Or are you willing to admit that that is just another fantastical scenario?

11

asoneth t1_itzctac wrote

I think this is the best way of thinking about it.

I would be much more enthusiastic if the ballot initiative had picked 7% to be in closer alignment with our neighboring states and still substantially lower than the premium charged by states like NY and CA.

It is perfectly reasonable for FL and TX to compete on price to attract residents just as it's perfectly reasonable for other states to charge a premium and focus more on quality of life and amenities. The nice thing about the laboratory of democracy is that we get to see what people actually value and states can respond accordingly.

−1

modernhomeowner t1_itxn037 wrote

I truly am concerned that this backfires and I'm the one that gets less stuff out of it. Less teacher in the classroom for my kids, or more taxes for me because rich people, who pay the majority of taxes in this state, leave and I'm the one without. I don't count NY as a neighbor to the hub of Boston where most people live, I count Maine at the highest 7.15, RI at 5.9 and NH at 0 wage 5 investment as neighbors, although you can fairly call me out for being eastern-centric, but that is where the majority of people in this state live.

If we had a surplus this year, why risk it, why even take the chance that we could be worse off? I will tell you right now if my state taxes went up 72%, I'd be pretty pissed off and would leave, and my extra 72%, is nowhere near the dollar amount of a rich person. I just think everybody has blinders on thinking that rich people will just roll over and after being called all these greedy names during the election cycle, having their picture sent on postcards with their salaries or net worth as if they are bad people, why the heck would you stay in this state after that?

−5

Yeti_Poet t1_ity06hk wrote

So assume it doesn't backfire. We institute a progressive tax, a year later revenues don't go down because of move-outs but instead are up as expected, and the wealthy pay a larger share -- you then think it's a good policy?

7

asoneth t1_itze6ap wrote

This is an important and valid concern that I share as well. If it helps you sleep better at night, the most thorough analysis I've seen concludes that:

"Together, cross-border moves and tax avoidance would reduce millionaires tax revenue by roughly 35 percent [to $1.3 billion]. (Absent these responses, the tax would be expected to raise $2.1 billion in 2023.)"

Via: https://cspa.tufts.edu/node/406

So it seems that 9% is still low enough to be a net positive from an income tax revenue perspective. (Though local property taxes may also take a small hit.) It won't raise as much as many people expect due to tax avoidance, but it also probably won't result in lowering the state's overall tax revenue.

Still, I would feel much more confident voting yes if they had chosen something like 7% as the top marginal tax rate to be more in alignment with the average of our neighboring states to test the waters. Going from a flat rate straight to a CA/NY/NJ/VT-level marginal rate overnight seems unnecessarily risky.

−2

modernhomeowner t1_itzevib wrote

Exactly, that's fairly exactly what I told my wife. I think 6% at $1M, 7% at $5M... I would have voted for that... And not sending postcards personally attacking people. It wouldn't have seemed like such a personal attack on those people, which to me, the personal attacks is going to make people move who were on the fence over the tax rates. I think the Yes superpac, the way they are proposing this by attacking people, is going to create more tax avoiders than analysts would otherwise expect, which is why I think we will become net losers.

2

SLEEyawnPY t1_ity6bm7 wrote

​

>People will leave. It's how many is the question and what income level.

They may move to one of the towns in e.g. TN I'm familiar with large plots of multimillion-dollar homes on the outskirts, meanwhile the town center is still dead and boarded up, and the trailer parks still full.

Unfortunately simple environmental exposure to the heavenly radiant glow of the very well-to-do residing nearby, a thriving local economy does not make. I live in one of the wealthiest areas of the state, median income near $150,000 and watched five restaurants in town go out of business in eight years. A thousand millionaires (at least!) with at least one residence within five miles couldn't save them. Well, maybe they just had bad food..

But a good rule-of-thumb is the super-rich tend to be super-selective about how they spend their money, and the New England variety of super-rich tends to be more of a cheapskate than average.

>One guy making $50M a year and moving to Florida costs MA $2.5M a year in lost revenue.

And the chances he would have ever set foot in my business to spend a dime are asymptotically zero, and as you say the state already has a surplus.

Aside from the possible localized reduction in heavenly radiant glow (and there are so many millionaires in my town the glow keeps me up at night, sometimes, it sounds like angels singing 'aaaaahhhh') I'm not concerned over his absence.

4

pennant_fever t1_itxb1w4 wrote

Let me get this straight. Someone making $1.1 million per year is going to leave their home and move to another state, potentially hundreds of miles away, because they’ll be taxed an extra $4,000 per year? That’s about 1 day of wages, or the equivalent of an annual increase of $120 (or $10/month) to someone making MA’s $15/hour minimum wage. Which would be (and has been) a much more painful increase.

Of course, for higher earners, the pain of this increase is even less, as they’re clearing more income.

The existence of people making millions per year while so many are struggling is immoral. Contributing one day of wages if you make more than $1 million per year is, frankly, not enough. But it’s a start, and no one who actually wants to live here or do business here would ever move away because of it.

15

modernhomeowner t1_itxbyl6 wrote

Someone earning 1.1, may not leave. 2, maybe, 5, likely, 10 or 20, it would be on top of mind for sure. If I'm making $10M a year, paying $500,000 to MA, plus everything I pay to the US (and if US raises, you'll see even more leave MA), I'd feel like it was a smack in the face that you now want $860,000, a 72% increase. Rich people aren't dumb, and they are generous to the causes they want to be.. if they don't think the State of Massachusetts, who had a surplus last year, is a cause they want to be 72% more generous to, they will leave. They don't need to sell their home, they can just spend 183 days outside the state, something they may vary well be close to anyway. People think it is so hard to move states, it's super easy when you have people to pack for you.. and if you already have that ski cabin in NH, and by spending a few extra weeks in the summer takes your taxes back down to 5% for investments, or $0 for earned income, why not just spend that extra time there, and give a middle finger to the ungrateful people of MA who sent out postcards calling you greedy.

−5

TheLittleGardenia t1_itxi87p wrote

This is the silliest thing ever - rich people don’t care that much about that money. Convenience is way more important

10

modernhomeowner t1_itxj3qm wrote

Any other sub on Reddit is about rich people being greedy and doing anything to get out of taxes... Except apparently in MA, apparently we all seem to think rich people are upstanding citizens who don't care about money and can't wait to pay more taxes.

−4

TheLittleGardenia t1_itxjn8j wrote

There’s a meaningful difference between filing taxes to reduce tax burden and actually moving your family. Not sure how this is hard to understand

12

modernhomeowner t1_itxlfyx wrote

They don't have to go far, they don't even have to actually move, just extend the time in their vacation homes so their tax burden gets shifted to that state. People do it all the time. People left whole countries to avoid high taxes, they left Greece in droves. My parents live in Florida, and most of their neighborhood are people who left NY or Illinois to save $10 or $20k in taxes, the guy next door moved his kids and mother in law from Oregon, and everytime I'm there the neighbors talk about how much they save in taxes and ask when am I coming. It's totally nieve to think someone wouldn't at the least just spend extra time in a vacation home to avoid taxes. I know people who work in Boston but work from home in NH just to avoid wage tax a few days a week.

0

SLEEyawnPY t1_itydqoi wrote

>If I'm making $10M a year

If you were making $10M a year and living in MA, but were young enough/responsibility-free/attachment-free enough such that you can just pick up and move in relatively short order, "why are you still here" would be my first question!

Our gorgeous weather, white sand beaches, and stunningly beautiful local population of eligible bachelors/bachelorettes?

>They don't need to sell their home, they can just spend 183 days outside the state, something they may vary well be close to anyway.

Right, so why fret over the inevitable. Not much point in trying to convince someone not to bail out who's already packed their bags and has a foot out the door, anyway, seems like a lost cause at that point.

7

dudeKhed t1_itxv4c6 wrote

Fuck off, you tried this bullshit argument under another Username already…

5

socialist_frzn_milk t1_itz854n wrote

LOL, then let them fucking leave. Tired of letting billionaires hold us hostage.

5

modernhomeowner t1_itzatoz wrote

They aren't holding us hostage, they are paying more in taxes than I am. You can't tax a billionaire (or anyone else) if they aren't here. How is them leaving a "freeing" thing for us?

−1

socialist_frzn_milk t1_itzbyqf wrote

How’s that boot taste?

6

modernhomeowner t1_itzd18t wrote

You didn't answer the question. "How's that boot taste" is a cop out when you don't have any real response. If say an Abigail Johnson decides to just retire and change her residency to another state, something that happens a lot when a parent passes in businesses like hers, her dad passed this year, and if they live in a high-tax state - I wouldn't call MA a high-tax state today, but I would if this passes. I'd guess she pays $37M to Massachusetts in taxes each year, plus or minus $10M. If after these postcards go out making her look evil and voters have gone alone with it and decide to increase her taxes by 80%, if she decides to leave, she no longer pays her $37M to Massachusetts, are you going to be okay with about 300 teachers less in the classroom due to that cut? Are you okay when Maura Healy has to propose raising the sales tax rate to compensate?

Whether you'd like your head in the sand or not, that is exactly what happens in other states when they raise taxes, the wealthy leave, leaving less services and higher taxes for those who remain. Higher income tax rates do not always mean more revenue, especially when they are forced upon those who are most mobile.

−2

socialist_frzn_milk t1_itzelsy wrote

I reiterate: how’s that boot taste? “They’ll leave!” is an empty threat that greedy billionaires use when they want to stop a state from making them pay their fair share in taxes.

2

modernhomeowner t1_itzfcqr wrote

What is fair? They pay 5% just like I do. We drive on the same roads. They pay a lot more than I do. That is fair.

0

socialist_frzn_milk t1_itzfy2t wrote

What is fair, you ask? Well, it would start with stopping billionaires from doing this.

https://www.propublica.org/article/billionaires-tax-avoidance-techniques-irs-files

3

modernhomeowner t1_itzglo1 wrote

Those are all strategies to reduce taxable income, which is a different discussion than rate of tax. Certainly a valid discussion, but unrelated. If I don't have taxable income, the tax rate can be 100%, it doesn't matter because I don't need to pay. But you do bring a good point, if they are willing to pay accountants hundreds of thousands to manage those tax strategies, the easiest strategy to avoid this new MA tax is very cheap, to just leave, no accountant necessary.

1

plastroncafe t1_iu0bsl4 wrote

Businesses are beholden to their stock holders, because of their investment in the company, yes?

So too should citizens be beholden to their fellow citizens because of their investment in the spaces we share.
No millionaire made their money alone. They used public infrastructure. And in the making of their business, they used those resources more.

More wear and tear.

1

modernhomeowner t1_iu0czfz wrote

That's not the same comparison, 90% of shareholders can't vote that the other 10% of shareholders have to invest more in the business.

They didn't make their money alone, they are paying a lot more in taxes than I am. I'm not opposed to a progressive tax rate, but calling it "fair share" just makes me cringe, that is not fair to decide that someone else should pay a higher percentage than you do.

We all benefit from roads, you can't say a business benefits more or less. Walmart gets the benefit that customers can drive there to pick up apples and shampoo, but I as a citizen also need those roads to buy apples and shampoo otherwise my life would be a lot worse off. We equally benefit from those roads. I pay 5% on my little tiny income, someone with higher incomes, their 5% is a lot more toward the roads. I can agree maybe they should pay 6 or 7, but the one thing that is not is the definition of a "fair share".

1

asoneth t1_itzers7 wrote

This is a reasonable concern. The most thorough analysis I've seen (also mentioned below) projects that increased tax avoidance will have a larger impact than people moving out of state. But taken together they won't be quite enough to make the impact of this change negative:

"Together, cross-border moves and tax avoidance would reduce millionaires tax revenue by roughly 35 percent [to $1.3 billion]. (Absent these responses, the tax would be expected to raise $2.1 billion in 2023.)"

Via: https://cspa.tufts.edu/node/406

2

BF1shY t1_itzr0r6 wrote

Yeah hundreds of millionaires will up root their lives, sell their house and move their families rather than pay a bit more taxes...

Literally not how it works. The tax would apply to 0.6% households in MA and rake in an extra $1.3 billion to the state.

If you don't support the rich paying back into society that they exploit to get rich in the first place perhaps YOU should move to one of the backwards southern states you've listed.

You support almost 7,000,000 people not having better education, roads and infrastructure over 42,000 millionaires paying a bit more taxes...

1

modernhomeowner t1_itzs5g5 wrote

In history, people haven't always gotten better education or roads by increasing taxes, they sometimes get less of that, because it is so easy to leave. This is a common problem in NY, Illinois, California, and in many countries in Europe, higher taxes meant less services because they brought in less revenue as people left. Denmark, Greece, France, all experienced this. How we are going about it here in MA may be even worse; If someone sent your picture all over the state and called you greedy and got the whole state to vote to tax you more, would you not leave? I sure as heck would.

And we don't need all 42,000 to leave. The 20,000 that make just over $1M, who will each pay a few thousand more, they probably won't leave, but more than a few of those making $5,$10,$20M leave, and we have a budget shortfall on our hands.

0

BF1shY t1_iu0u0u0 wrote

I believe you may be mistaken, as measures like this lead to more tax revenue not less, and reports of mass migrations are probably scare tactics and nothing more, although I have not researched the numbers.

If I was to get 4% tax on my income I would definitely not leave the state. I might not be happy and bitch about it, but selling my home, pulling my kids out of school, and moving away from all the family we have over 4%? No. I would not.

Bottom line for me is: It may be a complete disaster and failure, but we can also reverse this measure with another vote. We have been waiting for tricklenomics to trickle their way down to the working class since Regan and they still have not. So I say lets try something new, anything new. It's okay if it fails, but being resistant and afraid of change will get us no where.

1

modernhomeowner t1_iu0wwle wrote

Just look up countries that had high taxes. Look at NY, they have to keep raising taxes from higher income people moving out. Reversing the increases worked just fine for Denmark, they ended up doing very well after cutting taxes back down, but that takes more guts to say "we're going to have a few years of major budget cuts before we can attract new talent again." Taxing the rich only works if there are rich people.

I do think you underestimate dramatically how easy it is to move. They don't even need to sell their home, they probably already have one in a lower tax state that all they need to do is stay in the other home more days than the state here. I think people confuse the challenges someone earning $40k may have moving and someone who earns $5M a year, it's as easy as signing paperwork.

I am fortunate enough to have worked a lot of hours in my 20s and can pick up and go if my kids school starts to have teacher cuts or if the state now tries to raise taxes on me. I already once left a state that raised taxes on working folks when the rich left, I can easily do it again. From the sounds of it, many people on this discussion think moving is hard and that leads me to believe they wouldn't be able to leave as easily as I could if conditions suffer. Just to be clear, do I think this one measure is doom and gloom, absolutely not. I don't believe enough people would leave that we will have catastrophic layoffs of teachers, but I do think there will be some issues 3 or 4 years down the line. Add that to the highest electricity rates in the US, my property taxes up are 40% since I moved 5 years ago, the cost of produce seems to be increasing a little more than other parts of the country, eggs which used to be the cheapest source of protein is up 1,100% in MA but no where else in the country is anywhere near that increase, heating costs are growing at a crazy rate; when you compound it all, we aren't making smart thought-out decisions in MA. It seems we are going for legislation based on talking points rather than looking at the full consequences of our policies.

1