MODEL BILLS

Millionaire Tax (Fairness in Taxation Act)

Summary: Affluent households pay a disproportionately low share of the tax burden. The Fairness in Taxation Act would add an addition tax of four percent for income earned over one million dollars per year.

Based on Massachusetts HB 86 (2020), which was enacted as a constitutional amendment

SECTION 1. SHORT TITLE

This Act shall be called the “Fairness in Taxation Act.”

SECTION 2. FINDINGS AND PURPOSE

(1) Our tax system is unfair. Wealth in the United States has become concentrated among the nation’s richest households to an extent not seen since the 1920s. Compared to the benefits they receive from government, affluent households pay a disproportionately low share of the tax burden.

(2) Throughout U.S. history, it has been common to create a new tax bracket to alter the extent to which the tax burden is shared. Further, the revenues generated by a new tax bracket would be significant. [Estimate here.]

(3) Over the past twenty years, California, Connecticut, Hawaii, Maine, Maryland, Massachusetts, New Jersey, Oregon, Wisconsin and other jurisdictions have adopted greater tax rates for higher tax brackets.

(4) Our state needs revenues to meet future needs for education, especially in public and higher education, energy infrastructure, and public transportation.

(B) PURPOSE—This law is enacted to strengthen disclosure in election advertisements, defending truth as the cornerstone of our democratic system.

SECTION 3. XXXXXXXX

After section XXX, the following new section XXX shall be inserted:

(1) To provide the resources for quality public education and affordable public colleges and universities, for energy infrastructure to meet climate change goals, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes.

(2) In addition to the taxes on income otherwise authorized under this Code, there shall be an additional tax of four percent on that portion of annual taxable income in excess of one million dollars reported on any return related to those taxes.

(3) To ensure that this additional tax continues to apply only to the state’s highest income taxpayers, this one million dollar income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets.

SECTION 4. EFFECTIVE DATE

This law shall apply to all tax years beginning on or after January 1, 202X.