Among the information circulated to voters by the state, the argument in favor of the tax comes from Cynthia Roy, who is only identified as being from “Fair Share Massachusetts.” Roy turns out to be a member of the Executive Committee of the Massachusetts Teachers Association. She did not respond to my phone messages and emails requesting comment.
Many taxpayers, not just billionaires, want the Massachusetts business community to fund a campaign to educate voters about the dangers of this tax increase. That would at least create a level playing field. There is still time.
But seeing the teachers’ union pouring so much money into raising income taxes in Massachusetts got me thinking about possible alternative strategies.
It may sound far-fetched. But as any competent tax or accountant understands, there are tricks to defining and timing income. Under Massachusetts law, a teacher is granted tenure after three years of her service, effectively guaranteeing a career with future earnings, health insurance, and an annual pension worth about 80% of her earnings.
Calculate the approximate number of teachers who are in office at age 30, work for 35 years, and then receive a pension for 20 years. In Boston and suburbs such as Brookline, Wellesley, Concord, Weston and Lincoln, average According to Massachusetts data, 2019-2020 teacher salaries ranged from $100,041 at Brookline to $110,665 at Concord Carlisle. Salaries have risen since then and don’t reflect the value of health insurance provided by employers, averaging $100,000 a year for 35 years he’s $3.5 million. 20 years with an $80,000 pension is another $1.6 million. So a tenured teacher is essentially earning her $5.1 million. Given the value of health insurance and the reality of yearly upward adjustments, it may be an underestimate.
How can I stop the Massachusetts or federal tax authorities from determining, for income tax purposes, that a public school teacher, if in service, is taxed on the entire value of $5 million?$1 million or more? Have teachers figure out how to calculate a 4 percent “fair share” tax on $4 million in income, or $160,000. Non-teacher families who inherit a business, retirement account, or home may face similar tax challenges. Perhaps some Bay State teachers faced with this situation would decide they would be better off using their talents to serve students in lower tax jurisdictions such as Florida and New Hampshire. .
EJ McMahon, a founding senior fellow at the Empire Center for Public Policy, an Albany, N.Y.-based think tank that has worked to add transparency to the public sector payroll debate, said it costs $1 million to buy one. It is a lifetime annuity that yields pension benefits that most career teachers in New York public schools collect.
I implemented the idea of a “tenure tax” by Jim Sturgios, executive director of the Pioneer Institute, a Boston-based free-market think tank. Stergios continues to work against his Question One, recently wall street journal An opinion piece with the headline “Don’t make Massachusetts ‘Taxachusetts’ again.” he was skeptical. “It doesn’t scare them,” he warned me. “It’s good for laughter.”
They haven’t put a tax on laughter yet. But its value should not be underestimated. Since the days of Samuel Adams, a sense of humor has been essential in combating Massachusetts tax increases. But Adams and his fellow patriots were only able to get rid of the British monarchy and parliament, not the $15.8 million political spending of the teachers’ union in favor of raising taxes.
Ira Stoll Education next.