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Study: Graduated Income Tax Proposal Fails to Protect Taxpayers from Bracket Creep
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The state constitutional amendment proposed by the Service Employees International Union and the Massachusetts Teachers Association to add a 4 percent surtax to all annual income above $1 million purports to use cost-of-living-based bracket adjustments as a safeguard that will ensure only millionaires will pay. But historic income growth trends suggest that bracket creep will cause many non-millionaires to be subject to the surtax over time, according to a new study published by Pioneer Institute. Proponents of a graduated income tax insisted on an escalation factor that will be punitive to many more Massachusetts taxpayers than they claim. If the measure had been tied to the median household income, it would have better protected taxpayers from bracket creep. - Greg Sullivan