No need to look up. The rich are not getting away in a hot air balloon. (WMP&I)

Last Tuesday, Governor Maura Healey signed a $1.3 billion supplemental spending bill. The funds will pour hundreds of millions of dollars into both education and transportation. The Millionaires Tax, or Fair Share Amendment, voters approved in 2022 will pay for the spending. Healey, Lieutenant Governor Kim Driscoll and legislators gathered to fete the critical investments in the commonwealth’s people and infrastructure.

“We aren’t done, but this is the start of a new era of modern, reliable transportation all across Massachusetts, and we’re also making substantial investments in education,” Healey said at the signing last week, per the State House News Service.

It is hard to believe a little over a week before, Healey seemed to doubt the tax.

Technically, she was raising concerns about whether the tax was scaring the rich out of Massachusetts. Still, it caused a kerfuffle that freaked out progressives and titillated the quasi-libertarian class like the Pioneer Institute. Healey came back onsides quickly. What politician would really resist revenue the voters gifted to make popular things happen? Yet, the episode speaks to a problem within Democratic and elite circles in Massachusetts.

In fairness Healey barely dipped a whole toe into the repeal pool when she made those comments two weeks ago.

“No, I think we need to evaluate what’s going on, and I want to see the numbers,” Healey said according to The Boston Globe. “I just want to see what’s happening in terms of any potential outmigration.”

Healey’s comments prompted gasps. Yet, she was merely indulging a wringing of hands about the tax that has echoed ever since its passage. The Globe or other publications have also clutched their pearls at the thought of Massachusetts’s wealthy absconding with the economic crown jewels.

That fear rests on vibes, not evidence.

It is no surprise that a subset of the wealthy is whining about losing four cents of every dollar they make over $1 million. While it may seem surprising a Democratic pol would give voice to these fears, it makes some unfortunate sense.

It is an frustrating fact of societies that the wealthy and titans of industry have disproportionate access to decisionmakers. Whether it is campaign donations or resources to create jobs, such people will get facetime with leaders. Some of it is just the milieu political leaders live in.

During the race to lead the DNC last year, candidates for chair at a Boston did plenty of (justified) consultant-bashing. (WMP&I)

A subtler and perhaps more pernicious factor is the role of consultants. While consultants will never go away in politics, the bases of both parties has long viewed them with suspicion. Since last November, many Democrats have laid blame—reasonably—on an ossified, incumbent class of paid advisers who have delivered little.

In Massachusetts, this has been manifesting for far longer. Cowed by Charlie Baker’s popularity and still traumatized by Scott Brown’s hot second in the Bay State spotlight, many Dems remain convinced—and advised—to be ultra careful. It is always better—this thinking goes, whether explicitly or implicitly—to give residents crappier services if better services mean asking residents for one more cent—or four—on the dollar.

That thinking is arcane. Voters have not supported a tax cut via ballot initiative in two decades. It took Baker two terrible-for-Democrats election cycles to only barely win in 2014. Residents fell in love with the mirage of his governance, something no Republican running statewide can replicate from opposition.

To be clear, the Fair Share Amendment, as supporters of the Millionaires Tax call it, has artless and clunky features. It is a blunt instrument to make taxes more progressive. A nearly century-old Supreme Judicial Court decision prohibits graduated taxation—e.g. income tax brackets—in Massachusetts. Previous efforts to overturn that decision via constitutional amendment have failed.

Supporters of the Fair Share Amendment reasoned that voters might go for an amendment if it directed the revenue to popular things like schools and transportation and only affected millionaires. They were right. However, little more than political pressure ensures new revenue become additional spending rather than backfilling cuts in the regular budget. So far, the legislature has largely directed that funding to new spending. (It is unclear if that held true in the latest budget.)

Indeed, whether state leaders are spending the money appropriately deserves far more attention than empty plutocratic grousing.

Supporters of the tax have provided evidence the wealthy are not fleeing in any meaningful numbers. For example, the State House News Service reported on an analysis tax supporters released that showed the number of wealthy individuals has increased.

However, the most compelling argument against outmigration due to the tax is the impressive revenue that has been flowing into the Commonwealth’s treasury. Indeed, Fair Share revenue has been a bright spot amid otherwise middling tax collections.

The legislature and governor lessened the estate tax the year the Millionaires Tax took effect. Affluent whining remains untaxed, however. (WMP&I)

This should not be surprising. First of all, Healey and the legislature have already softened some of the blow with other tax cuts. Many benefited the middle and lower classes, but changes to the inheritance taxes definitely helped the rich more.

However, there is a more fundamental factor that undermines the notion of the runaway rich. The standard of living in Massachusetts is vastly superior to low tax jurisdictions, including for the rich. If that were untrue, Beacon Hill’s ancient brownstones would not be worth millions of dollars and the affluent would not be bidding for palaces in the suburbs or along the ocean.

The Globe talked to people who raised the specter of remote work as a warning about the tax. This is absurd. The power of virtual participation and remote work was made plain during the pandemic in 2020. The Fair Share Amendment passed in 2022. If remote work gave the wealthy an easy out from under the Millionaires Tax, they would have fled already.

Despite the hysterics of the likes of the Pioneer Institute, many rich people prefer to live in a place with Massachusetts’s advantages. The rich have been paying more in Connecticut for decades. They still have not relocated. Yes, some of the well-heeled fled New York City during the pandemic for Florida and elsewhere. Many came back.

Why would the rich leave Massachusetts over such a paltry surcharge? Plus, the benefits to society in Massachusetts will almost certainly result in the wealthy earning more back than they pay in taxes.

The real force powering outmigration is the high cost of housing that the legislature has still not fully addressed. The steps so far help. Yet, they are not remotely enough when localities continue to use zoning to block desperately needed housing. Indeed, those leaving Massachusetts are overwhelmingly individuals nowhere near the Fair Share Amendment’s million dollar threshold.

Healey’s comments will fade into obscurity. The incentives to support the tax are ultimately too strong to bring about a sustained call to meaningfully change the tax, unless the revenue collapses.

Yet, there is a broader point about Massachusetts breaking free from the paranoia about Taxachusetts and the bad advice it has spawned. There are real and material needs that Massachusetts cannot afford to ignore. Healey, to her credit, has abandoned her predecessor’s less-is-more approach to government. It has let the state not only staff up but even recruit employees escaping the Trump administration’s attack on the federal civil service.

These investments and revenue growth have allowed state and local governments in Massachusetts to build out services for the first time in decades. Revenue growth has slowed. Still, the dividends have manifested in stronger communities, lower crime and a stable economy (for now, anyway).

In an era in which the federal government has become an unreliable if not hostile partner, Massachusetts must embrace its capacity to fund its needs. To fret about the chimera of the rich abandoning the state will only undermine the Commonwealth and rob it of its ability to endure until the national calamity passes, whenever that may be.

Treading water for now. (WMP&I)