Free tuition and public transportation expansion: Massachusetts debunks myths

Free tuition and public transportation expansion: Massachusetts debunks myths about millionaire taxes

by Kontrast Editorial Team


[This article posted on 1/13/2026 is translated from the German on the Internet, ,]

Reading time: 3 minutes




Three years ago, the Democratic-governed US state of Massachusetts introduced a millionaire tax. Anyone earning more than a million dollars a year pays an additional 4 percent in taxes. Despite all the warnings from critics, the evidence shows that the economy continues to grow, the rich have not left, and the population is benefiting enormously. In the first three years, this generated $5.7 billion, which was used to improve infrastructure and significantly expand education.

The US state of Massachusetts provides an example of how a higher contribution from millionaires benefits everyone. A reform passed by voters in 2022 introduced an additional 4% tax on annual incomes above one million dollars. The resulting additional funds are earmarked for investment in public services.

The new New York City mayor, Zohran Mamdani, sees this so-called fair share tax as a model. During his election campaign, he also called for an additional 2% tax on urban incomes above one million dollars. His goal: to use the money raised to finance the fight against New York's housing shortage.

A wealth tax does not lead to economic crises or the exodus of the super-rich

Unsurprisingly, critics predicted economic crises and an exodus of the wealthy. The Cato Institute described Mamdani's tax plans as “wishful thinking,” while Andrew Cuomo, his rival in the race for New York City mayor, threatened to move to Florida.

The people of Massachusetts heard the same arguments in 2022. Led by billionaires Robert Kraft (owner of the New England Patriots football team), Jim Davis (owner of New Balance), and Boston investment firm CrossHarbor Capital Partners, the opposition argued that the Fair Share Tax would not solve the state's financial problems, but would lead to tax evasion and disadvantage homeowners who sell their homes.

Wealth tax survey: Two-thirds of Austrians are in favor. (Image: Kontrast.at)

Expectations exceeded: tax brought in twice as much money as planned

But what has really happened three years after the millionaire tax was introduced? The facts show that revenue from the Fair Share Tax has actually exceeded expectations. Since 2022, the Democratic-governed state has collected $5.7 billion from the tax, doubling its original projections.

Legislators had originally assumed that the additional tax would bring in around $1 billion per year. But the forecasts were exceeded in the very first year, with a surplus of $2.2 billion. In the 2025 fiscal year, revenue from the Fair Share Tax even accounted for 5% of the total state budget.

Free meals for schoolchildren, free college tuition, and expansion of public transportation

As stipulated in the amendment to the law, the additional revenue was used for education and transportation infrastructure. For example, since 2023, all schoolchildren in Massachusetts have received free breakfast and lunch. Additional teachers were hired, school buildings were modernized, and all residents of the state were given access to free tuition at community colleges.

And that's not all: the Fair Share Program also strengthened public transportation. A total of 76 kilometers of commuter rail lines were renovated, 20 bridges were repaired, and rural roads were improved. In addition, $200 million was allocated to regional transportation agencies for free bus rides, longer operating hours, and more drivers.

Cartoon: Karl Berger

Despite the millionaire tax: no exodus of the super-rich

Contrary to the widespread narrative about wealth taxes, there was no significant exodus of wealthy residents. On the contrary, the number of millionaires by net worth increased by more than 30%, and the exodus of young, non-wealthy workers has slowed.

The data from Massachusetts clearly contradicts the dire warnings of the wealthy and their common self-image as rootless jet-setters who supposedly automatically migrate to the most tax-friendly areas.

According to economic sociologist Cristobal Young, a large part of wealth accumulation is still based on location and insider advantages. In concrete terms, this means that social factors make it clear that even wealthy people often remain in their place of residence despite higher taxes.

Against the backdrop of increasing inequality, Massachusetts is demonstrating that a higher contribution from the wealthiest can promote social mobility and secure investment in infrastructure and public services.

Tax office demands: Austria loses €2 billion annually through tax evasion


redaktion [at] kontrast.at

++++++++++++++

Housing shortage: politicians and the media ignore solutions

The value gains generated by society could be skimmed off to a greater extent. This would solve the problem.

The problem is well known: Switzerland has too few apartments, and those that are available are too expensive. One of the main causes is rising land prices. According to figures from the Statistical Office of the Canton of Zurich and the Federal Statistical Office, land prices in the canton of Zurich have risen around ten times faster than wages over the last twenty years. […]

The current regulations allow land prices to rise. This increase could be slowed down by adjusting the regulations. An obvious solution would be to levy taxes on the increase in land value, which is created by society as a whole but largely left to landowners. One simple option would be to increase the skimming of land gains and planning surpluses, as the instruments for this already exist. Land gains and planning surpluses are already being skimmed, but higher tax rates and, if necessary, measures to prevent these taxes from being circumvented would be required.

Source: Infosperber


https://www.infosperber.ch/politik/wohnungsknappheit-politik-und-medien-blenden-loesungen-aus/