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MA has a flat income tax. Despite the name, this tax is not on millionaires, but people with incomes over $1M, which is hugely different. As someone who is wit

MA has a flat income tax. Despite the name, this tax is not on millionaires, but people with incomes over $1M, which is hugely different. As someone who is within the top 5% of household incomes, feels very wealthy for any practical needs, and is not even at half the threshold required to pay this tax, I am a huge supporter. I’m a bit confused how they failed to accurately predict the amount of revenue this would generate though. Why isn’t this an easy task given they already have income numbers for regular flat taxes?

HWR_14 2y ago
It's difficult to predict because taxes are somewhat manipulatable. Will more compensation be deferred to avoid the tax? Will some people retire or move?
- skeeter2020 2y ago
  exactly - they're going after a segment that has the freedom, resources and will to respond effectively, with an entire industry supporting them. Now watch the state budget on these new revenue numbers and see the shortfall in coming years.
  - jncfhnb 2y ago
    The article is suggesting the opposite has happened and that the tax revenues are a bit higher than expected
- jncfhnb 2y ago
  Rereading the article, which throws out a lot of misleading numbers, it sounds like their estimate was actually pretty close. So yeah I guess that seems reasonable
toast0 2y ago
A large amount of income above $1m/year is going to be capital gains, which is difficult to predict, even under an unchanging tax system. Also, if people are going to move to avoid higher taxes, they may not move all at once, and predicting that is likely hard, too. Better to underpromise and over deliver with tax revenues, anyway.
- jncfhnb 2y ago
  That’s a good point. There’s going to be huge correlations in individual income of high earners due to the market.
hedora 2y ago
Is it people with regular incomes over $1M, or does it include windfall years? Windfall years are hard to predict. Also, it’s much easier to get to a $1M peak income (inheritance, individual contributor at IPO, etc) than to get to $1M mean income (become a VC or executive). I’d be curious to see a histogram of the 5-year rolling average incomes of the people paying this tax.
- jncfhnb 2y ago
  I really give zero shits about people receiving windfalls of over $1M in a single year. They can pay an extra 4K per million just fine. There are no tears shed for these people.
  - silverquiet 2y ago
    Yes, I know snark is discouraged, but any time I hear this sort of plutocrat apologia, I want to respond, "oh yeah, why won't someone think of those poor, poor rich people with their million dollar windfalls". I always suspect a bit of astroturfing, but it's entirely possible that the propaganda has been internalized by those repeating it. But to them I say that if there's anyone in society you don't need to worry about, it's the rich (and anyone who's looking at a one mil windfall is going to be rich); they're going to be just fine.
    - hedora 2y ago
      It’s “windfall”, singular. In a sibling comment, I explained what the situation looks like for that group out here in California (hint: people paying these taxes can’t necessarily afford a house).
      - silverquiet 2y ago
        The top ten percent of people in the richest state in the richest country in the world are in fact rich. I'm sure they have their own status games they play that make them feel inferior to one another (what other point is there to such games?), and yes, they are small fish compared to actual plutocrats, but I assure you that they will find some way to make things work, just like the people who live off fractions of their income do.

HWR_14 2y ago

It's difficult to predict because taxes are somewhat manipulatable. Will more compensation be deferred to avoid the tax? Will some people retire or move?

skeeter2020 2y ago
exactly - they're going after a segment that has the freedom, resources and will to respond effectively, with an entire industry supporting them. Now watch the state budget on these new revenue numbers and see the shortfall in coming years.
- jncfhnb 2y ago
  The article is suggesting the opposite has happened and that the tax revenues are a bit higher than expected
jncfhnb 2y ago
Rereading the article, which throws out a lot of misleading numbers, it sounds like their estimate was actually pretty close. So yeah I guess that seems reasonable

toast0 2y ago

A large amount of income above $1m/year is going to be capital gains, which is difficult to predict, even under an unchanging tax system. Also, if people are going to move to avoid higher taxes, they may not move all at once, and predicting that is likely hard, too. Better to underpromise and over deliver with tax revenues, anyway.

jncfhnb 2y ago
That’s a good point. There’s going to be huge correlations in individual income of high earners due to the market.

hedora 2y ago

Is it people with regular incomes over $1M, or does it include windfall years? Windfall years are hard to predict. Also, it’s much easier to get to a $1M peak income (inheritance, individual contributor at IPO, etc) than to get to $1M mean income (become a VC or executive). I’d be curious to see a histogram of the 5-year rolling average incomes of the people paying this tax.

jncfhnb 2y ago
I really give zero shits about people receiving windfalls of over $1M in a single year. They can pay an extra 4K per million just fine. There are no tears shed for these people.
- silverquiet 2y ago
  Yes, I know snark is discouraged, but any time I hear this sort of plutocrat apologia, I want to respond, "oh yeah, why won't someone think of those poor, poor rich people with their million dollar windfalls". I always suspect a bit of astroturfing, but it's entirely possible that the propaganda has been internalized by those repeating it. But to them I say that if there's anyone in society you don't need to worry about, it's the rich (and anyone who's looking at a one mil windfall is going to be rich); they're going to be just fine.
  - hedora 2y ago
    It’s “windfall”, singular. In a sibling comment, I explained what the situation looks like for that group out here in California (hint: people paying these taxes can’t necessarily afford a house).
    - silverquiet 2y ago
      The top ten percent of people in the richest state in the richest country in the world are in fact rich. I'm sure they have their own status games they play that make them feel inferior to one another (what other point is there to such games?), and yes, they are small fish compared to actual plutocrats, but I assure you that they will find some way to make things work, just like the people who live off fractions of their income do.