Business Insider: Massachusetts passed a 4% millionaire’s tax last year. Now every public-school student will have access to free lunch
Article published: 13 August, 2023
IB Economics syllabus: Macroeconomics (government intervention, fiscal policy, equity, economic well-being)
Massachusetts introduced a 4% millionaire’s tax targeting high earners with income exceeding $1 million, which went into effect in 2023. This tax is expected to contribute around $1 billion to the state’s fiscal budget of $56.2 billion for the year 2024. A significant proportion of the generated revenue will be dedicated to providing free breakfast and lunch for all public school students, emphasizing equal educational opportunities. Additionally, state lawmakers have allocated $523 million for education and $477 million for transportation from the tax revenue, reflecting a strategic allocation of funds. This fiscal policy showcases the role of government intervention in macroeconomics and underscores discussions surrounding income distribution and equitable access to essential services.
IB Economics Internal Assessment (IA) Commentary
This article provides an excellent opportunity for an IB economics commentary. You can explore the tax’s impact on income distribution and equity, evaluate its effectiveness in addressing societal concerns, and assess the macroeconomic outcomes of reallocating funds for education. Comparing this income-based tax with a proposed wealth-based tax can lead to insightful discussions about policy efficacy and economic implications. As for diagrams, you can go for the Lorenz curve and perhaps an AD/AS diagram for the implications of fiscal policy.
Source of image: Mara Auster/Digital First Media/Boulder Daily Camera via Getty Images
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