.A day before lawmakers plan to vote on whether to put a constitutional amendment on the 2022 ballot to raise taxes on the wealthy, opponents are challenging the assertions by Democratic leaders that it could raise $2 billion for education and transportation with new research suggesting the tax would cost jobs and produce significantly less new revenue.

study done by the Beacon Hill Institute for Public Policy Research estimates that if wealthy earners in Massachusetts were forced to pay a 4 percent surtax on all income over $1 million it would generate $1.23 billion in new taxes in 2023.

That estimate, which climbs to $1.5 billion by 2027, is substantially less than the roughly $1.9 billion projected by the Department of Revenue six years ago.

BHI President David Tuerck and Director of Research William Burke also said the so-called millionaires tax would cost the state 9,329 private sector jobs in the first year and reduce the number of working households by 4,388, mostly due to high earners leaving Massachusetts for lower cost states.

“The reason it will raise less revenue than predicted is because the proponents don’t bother to figure out what it will do to the state economy,” Tuerck said on a conference call organized by the Massachusetts Fiscal Alliance Foundation.

Proponents for years have rejected arguments that the surtax on those earning over $1 million would prompt the wealthy to leave Massachusetts, and continue to make the case that despite the influx of tax dollars and federal COVID-19 relief funding the income surtax is needed to create a long-term funding source for education and transportation.

The last time the Department of Revenue looked at the proposal was in 2015 when it projected that by 2019 the income surtax would hit 19,650 tax filers and generate between $1.6 billion and $2.2 billion. The most recent data from the Internal Revenue Service show that Massachusetts had 20,040 filers in 2018 with adjusted gross income in excess of $1 million, accounting for nearly $70.7 billion in income.

“It’s not a surprise that another think tank funded by multi-millionaires are arguing they shouldn’t pay more in taxes, but the people in Massachusetts understand the million dollar earners have not been paying their fair share and can afford to pay a little more to make the investments we all need to thrive,” said Andrew Farnitano, a spokesman for the Raise Up Coalition.

Farnitano said the coalition “defers to DOR on revenue estimates” because it has direct access to taxpayer data, but noted that the fear of millionaire migration to low-tax states like New Hampshire or Florida has been downplayed by some research, including a 2014 study out of Stanford University.

That report found that while millionaires do move around for various reasons, very little evidence points to changes in high-income tax brackets as a motivating factor.

Raise Up, a coalition of labor, faith and community organizations, first tried to put the millionaires tax proposal on the ballot in 2018, but it was struck down by the Supreme Judicial Court as ineligible.

This time the amendment has been proposed by Rep. James O’Day of West Boylston and Sen. Jason Lewis of Winchester, rather than as a citizens petition, resolving the issues raised by the court and putting the amendment one vote away from the 2022 ballot.

Senate President Karen Spilka and House Speaker Ron Mariano have teed up the proposal for Wednesday afternoon when it will need the support of at least 101 of the 200 House and Senate lawmakers on Beacon Hill to advance to next year’s ballot.

When the proposal last went before the Legislature for a vote in 2019, it passed with 147 legislators in support. A second vote is required during this legislative session for the amendment to progress to the ballot.

Paul Craney, the spokesman for the Mass Fiscal Alliance Foundation, said it’s important that legislators have information on the tax’s impact before they vote Wednesday, and if it does pass he said he’s “optimistic” voters will reject it.

“They usually make the right decision on this,” Craney said, pointing to the defeat in Illinois last year of a ballot question to implement a graduated income tax.

Burke said that BHI’s analysis projects that the Massachusetts economy would shrink as a result of the new income surtax, with the think-tank’s model projecting a $431 million decrease in gross state product, a $931 million decrease in real disposable income and $7 million in lost investments.

Tuerck also called it a “dangerous claim” that proponents make when they say the money will be allocated for education and transportation, calling the money “fungible” and noting there’s nothing to stop the Legislature from using the income tax revenue to replace, rather that add to, money already being spent in those areas.

Tuerck also questioned the underlying need for more revenue, suggesting Massachusetts was already among the most generous in the country when it comes to per-pupil spending on public schools.

“Why do we really need to increase spending on education?” Tuerck asked.

“We’re raising substantially more revenue that we have historically in Massachusetts and nobody would look at the current budget and say we have a tax revenue crisis in the state. We do not. We don’t have a transportation and education crisis. What we have a is lot of money flowing into the Treasury because of the recovery we’re having,” he said.

State government is on track to end the fiscal year on July 1 with a substantial surplus as tax collections have outpaced the pessimistic pandemic projections of lawmakers and economists, and the Legislature is also starting to consider how it wants to allocate $5.3 billion in federal relief money over the next several years.

“This is the wrong tax increase at the wrong time,” Tuerck said.

Farnitano, however, said the wealth tax is about creating a “sustainable and long-term funding source” that will be there after the federal relief dollars are spent.

He pointed to the need to hire teachers, replace aging regional transit buses and make college more affordable for students, including non-traditional students who may be forced to think about a career change as a result of the pandemic.

“This constitutional amendment is not about one budget cycle or one economic cycle,” he said.

(Copyright (c) 2021 State House News Service.

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