MA 2022 Question 1 (Boston, Florida: bankrupt, public schools, median income)

[simplexsimon]

People worked really hard on their home price appreciation...they earned it.

[AtkinsonDan]

Originally Posted by simplexsimon

People worked really hard on their home price appreciation...they earned it.

It will be amusing if people who voted for this get screwed by the law later in their life. Many people are stupid, stubborn and short-sighted when they are young.

[BostonBornMassMade]

Originally Posted by AtkinsonDan

It will be amusing if people who voted for this get screwed by the law later in their life. Many people are stupid, stubborn and short-sighted when they are young.

As if most of yesterday's voters were "young"...lol.

[id77]

Originally Posted by MikePRU

Its a shame if this vote passes. Hopefully, they can fine tune the bill before it becomes law because IMO this wasn't ready for prime time yet. I don't have an issue with additional taxes on the rich, but it would have been nice to see things like an exclusion for folks that are "one time" earners at this level because of a home or business sale and it would be nice if this included a reduction in taxes for those not earning at this level since the state is currently running at a major surplus.

My thoughts:
- It's a 4% tax on income over $1 million. Nothing changes on the first million in gains, so a one-time income of $2 million for example would only incur an additional tax burden of $40k.

- And, for a thing like a home sale, the sale would actually have to be much larger as there's also the $250k/$500k exclusion on primary residences plus deducting all costs puts into the home.

What percentage of MA residents have sold a home at such a profit over what they paid to even get past the $500k exclusion and have to pay any cap gains taxes, let alone for an amount so much beyond that to also surpass $1 million in AGI for the year? A couple with a $300k AGI who paid $1 million for a home would have to sell that home for $2,200,001 before paying a cent in Question 1 tax, and for a sale of $2,200,001 their additional tax burden would be $0.04. If they sold their home for $3 million, their additional Q1 tax burden would only be $32k. This is a rounding error amount next to the existing tax they would have to pay regardless of Q1 on that sale.

For all the scare talk about how this can come back to bite people at some point, that fear is really overplayed and unlikely to happen to the vast majority of residents.

[maclel]

Originally Posted by BostonBornMassMade

Again..

On an income of $2.7M...

Your income after income tax is $2,497,000 instead of $2,565,000 currently.

Does that meaningfully change your lifetime windfall if you owned a house worth that much?

That is not the right way to think about it. The right way is to compare after tax income before and after the proposition. On an income (assume it’s not capital gains) of $2.7M household is already paying ~$950k in federal taxes, probably $50k in property taxes and let’s say $50 in sales taxes and other excise taxes. Their State taxes are going from $135k to $203k. In other words their after tax income went down from $1.515M to $1.447M, 4.5%. If they were spending $500k to support their lifestyle, their annual savings are down almost 7%.

Now, if they move to NH, they would be saving $203k plus let’s say $27k in sales taxes for a total $230k. Their after tax income would be up to $1.677M, 16% higher, and their annual savings go up 24%.

So, yes, this is a big deal for top earners in Massachusetts. This is going to push many of them just over the tipping point to move out of State, especially when we consider how anti-business regulation has become and will probably accelerate with our new socialist Governor. Financial firms and many corporation headquarters are definitely decamping. I know many who are already planning to move to FL or NH.

This inmoral and spiteful tax is the nail in the coffin for this State.

[bricka]

Originally Posted by maclel

That is not the right way to think about it. The right way is to compare after tax income before and after the proposition. On an income (assume it’s not capital gains) of $2.7M household is already paying ~$950k in federal taxes, probably $50k in property taxes and let’s say $50 in sales taxes and other excise taxes. Their State taxes are going from $135k to $203k. In other words their after tax income went down from $1.515M to $1.447M, 4.5%. If they were spending $500k to support their lifestyle, their annual savings are down almost 7%.

Now, if they move to NH, they would be saving $203k plus let’s say $27k in sales taxes for a total $230k. Their after tax income would be up to $1.677M, 16% higher, and their annual savings go up 24%.

So, yes, this is a big deal for top earners in Massachusetts. This is going to push many of them just over the tipping point to move out of State, especially when we consider how anti-business regulation has become and will probably accelerate with our new socialist Governor. Financial firms and many corporation headquarters are definitely decamping. I know many who are already planning to move to FL or NH.

This inmoral and spiteful tax is the nail in the coffin for this State.

bye!

[msRB311]

Originally Posted by BostonBornMassMade

As if most of yesterday's voters were "young"...lol.

Do you think most of them were old?

[timberline742]

Originally Posted by msRB311

Do you think most of them were old?

They almost always are. A much higher percentage of older eligible voters actually vote. That difference even more pronounced during midterm elections.

That said, this may be an anomaly this year, but I doubt it.

[BostonBornMassMade]

Originally Posted by maclel

That is not the right way to think about it. The right way is to compare after tax income before and after the proposition. On an income (assume it’s not capital gains) of $2.7M household is already paying ~$950k in federal taxes, probably $50k in property taxes and let’s say $50 in sales taxes and other excise taxes. Their State taxes are going from $135k to $203k. In other words their after tax income went down from $1.515M to $1.447M, 4.5%. If they were spending $500k to support their lifestyle, their annual savings are down almost 7%.

Now, if they move to NH, they would be saving $203k plus let’s say $27k in sales taxes for a total $230k. Their after tax income would be up to $1.677M, 16% higher, and their annual savings go up 24%.

So, yes, this is a big deal for top earners in Massachusetts. This is going to push many of them just over the tipping point to move out of State, especially when we consider how anti-business regulation has become and will probably accelerate with our new socialist Governor. Financial firms and many corporation headquarters are definitely decamping. I know many who are already planning to move to FL or NH.

This inmoral and spiteful tax is the nail in the coffin for this State.

Didn’t want to get into the weeds in that more realistic level because it makes no difference to me.

Suffice to say I feel no empathy about going from $1,515,000 to $1,447,000. I’m very very unmoved. For a myriad of reasons. If that individual is that selfish that they’d uproot for New Hampshire or, God forbid, Florida. Then why would you even want to associate with them?

Given the prosperity and obvious desirability of the state they will likely be replaced with an equally successful and more civic-minded person and/or business owner.

The state needs to ramp up the success level of its bottom schools (MA is beginning to lag a bit and see a widening achievement gap) and electrify the commuter rail as soon as possible. MA also needs climate defense. This is needed. The budget surplus was a one time deal that hasn’t happened in over 35 years.

[msRB311]

Originally Posted by timberline742

They almost always are. A much higher percentage of older eligible voters actually vote. That difference even more pronounced during midterm elections.

That said, this may be an anomaly this year, but I doubt it.

I find it hard to believe that all these voters in MA who voted Democrat were old. Sure some of them were but a high percentage of boomers in MA are Republican as well.