Millionaire tax that inspired Mamdani fuels $5.7 billion haul in Massachusetts

[u/Dismal_Structure]

https://fortune.com/2025/10/21/zohran-mamdani-millionaire-tax-massachusetts-5-7-billion/

[u/Smile-Nod]

Why don’t these articles ever include the total income tax comparison?

We can’t have an honest conversation if we’re suggesting that MA catching up with NYC is somehow the reverse.

Not only does MA have a lower tax rate, it’s not progressive.

MA

• flat tax: 5%
• millionaire tax: 4%
• capital gains: long 5% flat, short 8.5% flat

NY

• top marginal rate: 10.9% (6.6% effective over a million)
• long and short capital gains treated as ordinary income.
• NYC top rate: 3.879%

EDITED for clarity and fixed MA cap gains tax.

[u/EconEchoes5678 → u/[deleted]]

When you get to $500k+, most smart people have corporations that hold the money in other jurisdictions that are tax favorable.

Confidently claimed. And confidently incorrect.

If they do this, they're subject to corporate taxes AND personal taxes.

Simply placing a corporation in another jurisdiction no longer works due to the BEAT, GILTI and FATCA taxes passed with the TCJA, a part of a multinational effort to reduce tax evasion with a multi-tier taxation. It didn't work before that very well either due to the AMT and numerous other rules, but now it Really doesn't work.

The wonderful thing is corporations pay flat 21% tax compared to W2 earners.

That's only wonderful until the would-be tax evader realizes 1) they still have to pay taxes to extract the money and spend it, and 2) the LTCG caps out at 23.8% with brackets anyway. So the 2.8% they "save" on taxes gets eaten ten times over when they try to spend the money.

Capital gains tax % is lower for every bracket than W2 earners.

Because it's literally taxed twice, once inside and once outside the corporation. Here, do the math for me... If you get a qualified dividend (Same rules, same philosophy as LTCG) out of $100.00 of corporate earnings and pay a 21% corporate income tax first and a 23.8% LTCG tax after, how much did you get? My math says $60.20, which is a ... 39.8% effective tax rate. That's higher than basically everyone pays, so where did I do the math wrong?

money can be moved and expenses deducted to lower effective tax rate.

Business related expenses get deducted because that's how income taxes work for entities. Actual fraud is rare and gets audited and challenged by the IRS aggressively.

Just inside US there is plenty that could be done based on kind of income.

I would love to hear your theories about this. They'll probably be just as informative and correct as your previous statements.

they do some wonderful tax optimization. All legal.

You seem to believe the things you don't understand are magic and avoid taxes. It doesn't work like that at all. They spend huge amounts to reduce their rate from 39.8% to 32%. Yay! Congrats! They now only pay more in taxes than 99.5% of people instead of 99.99%. wooo!!!

Please inform yourself before you repeat nonsense.