Massachusetts has already collected $2.6b in ‘millionaires tax' cash, surging past state projections
Most of the additional money raised would go to a reserve account, from which state policymakers can pluck money for one-time investments into projects or programs.
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The amount of millionaires tax revenue collected this year was already expected to be significant, particularly after total
But cash from the surtax is are already topping what Healey administration officials roughly expected to collect for the entire fiscal year. The surge underscores both the surtax's potential as a major revenue driver and the ongoing difficulty state officials face in predicting exactly what it will deliver.
Last year, state officials initially said the surtax generated
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The state's Department of Revenue won't certify the official amount raised from the surtax for this fiscal year for several months.
Voters approved the millionaires tax
in 2022 to levy an additional 4 percent tax on annual earnings over $1 million. At the time, the Massachusetts Budget and Policy Center, a left-leaning think tank, projected it could
The cash it's produced has regularly blown past even that. The tax generated $1.5 billion between February and April of this year alone, according to state officials.
That surtax is 'highly responsive' to how the stock market and economy is performing, said Doug Howgate, president of Massachusetts Taxpayers Foundation, a business-backed budget watchdog. That makes it a 'moving target' for state officials, and a difficult one to predict as the country slides into an uncertain fiscal future.
The national economy
'The concern next year,' Howgate said, 'is that we're not using this [surtax money] for sustained recurring resources. . . .It certainly looks like we're in a different stock market world now than we were 12 months ago.'
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A huge millionaires tax surplus also doesn't automatically mean the state is enjoying a healthy fiscal picture. State officials have treated money from the surtax separately from other types of tax collections because under the state Constitution, the surtax revenue can only be spent on education and transportation.
And despite ending last year with extra surtax money, officials still had to close
Matt Stout can be reached at
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