Unpacking Massachusetts Question 1 - Axios BostonLog InLog InAxios Boston is an Axios company.

Unpacking Massachusetts Question 1

It's almost time to vote. Photo: Mike Deehan/Axios The local TV airwaves are filled this election season with ads telling voters how great, or dreadful, it would be to increase taxes on the highest-earning households in Massachusetts. You've seen the pitches: A “yes” vote on Question 1 would raise over $1 billion annually for transportation projects and education funding by having those who earn over $1 million a year pay more.A “no” vote would mean protecting wealthy taxpayers from lawmakers who can't be trusted to spend the money the way they say they will. How it works: Question 1 asks whether a new 4% surtax should be applied to income over $1 million.This would be on top of the existing 5% tax on all income brackets.For instance, if someone earns $1.5 million in a year, the additional 4% would apply only to the $500,000 over $1 million, and they would owe another $20,000.If they earn $1.01 million, the new tax would be $400. If they earn $999,999, there would be no change. Why it matters: The proposed change to the tax code would be relatively simple, but there's a lot of uncertainty about what the impact would be.A huge surge in funding for transportation and schools sounds good, but Beacon Hill lawmakers would still need to vote each year to send the newly raised funds where voters intend.The wealthy could use tax-avoidance schemes that would limit the revenue raised, or even leave Massachusetts and take all of their income taxes with them.Wealthy people and businesses may no longer want to move to Massachusetts because of the tax burden on the highest earners. Details: Tufts University's Center for State Policy Analysis laid out the .The higher tax level would apply to only 0.6% of Mass. households. Those few households contribute one-fifth of all income taxes to the state.Generating new revenue for education and transportation is popular with voters and could improve racial and economic inequality, help student outcomes and replace failing transportation systems.The amount raised will be subject to the boom-and-bust cycles of the economy. The big picture: The Boston Globe's Shirley Leung looked at those who don't normally earn over $1 million a year but may profit that much by selling a business, second home or investments. How people vote "will come down to whether you’re a millionaire or not, and whether you know one or expect to earn $1 million in a single year," Leung wrote. Get more local stories in your inbox with .Subscribe Support local journalism by becoming a member.

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