August 2022


Dear RAM Member:

Election Day is rapidly approaching, and beyond important candidate races, voters will be asked to decide on changes to laws on income taxes, alcohol permits, and dental insurance. The RAM Board of Directors voted in May to take positions on two of these public policy ballot initiatives.

The most visible and consequential issue will be Question 1, a constitutional amendment to place an income surcharge of 4% on top of taxpayers with an income of $1 million or more. This isn’t the first attempt by the tax increase advocates to put this measure on the ballot. A similar measure was knocked off the ballot in 2018 by the Supreme Judicial Court (SJC) for constitutional reasons.

Members may remember that our organization had our own ballot question tax reform measure that same election cycle. The RAM ballot question would have rolled back the regressive sales tax increase of 25% passed in 2009 back to the long-time rate of 5%. Understanding the messaging of the income tax increase advocates that lower income families pay a higher proportion of their incomes on state and local taxes than higher earners, RAM leadership saw the best way to make taxation fairer for low to middle income families was to reduce the sales tax. Yet, once the SJC knocked the income tax surcharge off the 2018 ballot, the door opened for RAM to remove our sales tax rollback from the ballot in exchange for labor cost relief with the removal of two other labor mandate initiatives. That labor relief included a more gradual minimum wage increase; a more reasonable tip wage for restaurants; a less onerous paid family and medical leave law; and a repeal of the antiquated and only in Massachusetts retail blue law premium pay requirement, which mandated time and a half pay on 52 Sundays and 6 holidays for stores, but not online sellers. In addition, the Sales Tax Holiday was put into permanent law. This legislative compromise became known as “The Grand Bargain.”

Ironically, had the income tax increase and sales tax rollback questions gone to the ballot in 2018, both likely would have won, and RAM may have stayed neutral on the income tax measure due to the overall tax reform package including reduced sales taxes.

Yet, advocates for higher income taxes didn’t end their efforts, despite the Grand Bargain and their wins on labor increases and paid leave mandates. RAM chose not to revisit the sales tax cut ballot question. We also surveyed our 4000 members to better determine their views on the 4% income tax surcharge. The results surprised us on how many of our members opposed the question, were “pass-through” corporations, which get taxed under the constitutional amendment; and how many members were looking to sell their businesses within the next 10 years, creating an additional tax hit under the tax hike.

Our member survey came back with an 82% rate of “pass through” tax structures, which are included in the $1 million threshold under the constitutional amendment; 60% plan to sell within 10 years triggering another big tax hit; and 67% believe higher earning consumers will leave Massachusetts with a 9% income tax rate.

So unlike 2018, RAM is now on the No on 1 side, and we urge our members to oppose the Constitutional Amendment Income Tax Surcharge.

Finally, the RAM Board also voted to oppose the alcohol permit question, Question 3, simply because it is flawed by not reforming the local regulatory scheme; and because it contains poison pills, including a reduction full liquor permits from 9 down to 7; and requires fines in lieu of suspension for stores and restaurants based upon their sales beyond alcohol (which is the current law), which would include sales of meals, food, gasoline, and other non-alcohol items. The measure is not a seller or consumer friendly reform, rather a thinly veiled protectionist measure.

Jon B. Hurst