Farmers to reap pain if state passes Millionaires Tax
The lawmakers behind the proposed “Millionaires Tax” in Massachusetts see the move as a way to pump cash into the state’s coffers.
They missed the part in which cash drains from small companies reliant on larger businesses bearing the burden of the tax hike.
Companies large and small often have a symbiotic relationship, and a blow to the big players can have devastating effects on smaller entities.
Case in point: Bay State farmers.
A group of local farmers joined a virtual press conference with the Massachusetts Fiscal Alliance Wednesday to call out the 4% surtax as one more financial burden in an industry facing many.
Paul Craney, spokesperson for MassFiscal, noted that most family farmers in the state don’t clear $1 million, which would trigger the surtax, but if they sell part of their property to reinvest in their farms, or large businesses leave Massachusetts, the pain would be significant.
Recall dairy company Horizon Organic, which pulled out of the Northeast last year, cutting ties with nearly 100 dairy farmers in the region. Almost overnight, their market was gone.
That should have been a wakeup call that smaller businesses are often dependent on larger ones to succeed, but Beacon Hill hit the snooze button.
Now the state’s facing a 4% surtax added to the 5% flat state individual income tax rate and a top federal individual income tax rate of 37%. If the amendment is adopted this November, the combined federal-state marginal tax rate on ordinary income for highincome earners in Massachusetts will be 46% in 2023 (lower rates will apply to dividends and capital gains), as The Hill reported.
And when the going gets tight, those being squeezed will head for the exits.
Leo Cakounes, who runs Harwich’s Cape Farm Supply and
Cranberry Co., said Wednesday that he previously did business with a company in Carver that purchased his crops and packaged them as sweetened dried cranberries, but that company has since been sold to a Canadian firm.
Cakounes and the groups against the surtax said they believe it will spur more businesses to leave Massachusetts.
“I can’t stress enough how people have to look out of the box when you’re looking at proposals such as this,” Cakounes said during the virtual press conference. “It’s not just those millionaires that are making x amount of dollars a year. It has a trickle-down effect when large companies and large businesses no longer want to do business in this state. It’s going to affect me, who quite honestly has never seen a million dollars of income in family farm products in my 20 years in the cranberry business.”
Proponents of the surtax couch it in hurray-for-the-little-guy terms, calling it the Fair Share Amendment. This fits with the view of big corporations and high earners as cartoon villains, rubbing their hands in gleeful greed.
But they are links in the economic chain, one that keeps family farms working for another generation, and lets other small business owners sell their firms and retire.
There’s nothing “fair” about ignoring the collateral damage inflicted on hard-working people.
No matter what you call it, the Millionaires Tax is a bad idea.