None of this happened by chance. Our political class created the policies that have made Massachusetts unaffordable for families and inhospitable to employers and investors. The consequences are unmistakable. <\/p>\n
Since 2012, the annual income leaving Massachusetts with departing residents has increased fivefold<\/a>. Over the period, the state has lost $24 billion<\/a> in income, costing the state government at least $1.2 billion in annual tax revenue. Since the start of the pandemic, the Commonwealth has lost 35,000 private sector jobs<\/a>, one of only six states to experience negative growth. Once one of America\u2019s most entrepreneurial states, Massachusetts has fallen from second to last in the country<\/a> on net business creation. <\/p>\n Massachusetts is losing people and wealth in every age cohort<\/a>. The first IRS migration data<\/a> since the 2022 adoption of the surtax on high earners \u2014 the so-called millionaires tax \u2014 shows two age groups standing out: taxpayers aged 55 to 64 accounted for the largest losses in income, followed by those ages 26 to 34. Translation: The state is losing the generation that builds businesses, invests, and makes retirement and estate-planning decisions \u2014 and the generation that buys homes, starts families, and drives future economic growth. <\/p>\n Repeated polling<\/a> shows an alarming number of Bay State residents are considering leaving \u2014 mainly because of the high cost of living. This year\u2019s ballot initiatives reflect those concerns, with many related to housing, energy, and taxes. <\/p>\n Ballot initiatives may be a poor way to govern, but they were created for moments when the Legislature repeatedly fails to act in the public interest. And this year, Massachusetts voters will see nearly a dozen of them.<\/p>\n I opposed the rent control initiative, recently removed from the ballot by the Supreme Judicial Court, because it would devastate supply and, while rewarding a few, make housing more expensive for the many. Unless Beacon Hill does more to support housing construction, voters will likely revisit the issue in 2028. <\/p>\n Similarly, lawmakers may celebrate the court\u2019s removal of the proposed income tax cut from 5 percent to 4 percent, which enjoyed strong public support, including among union members<\/a>. But the underlying problems \u2014 high costs, job losses, and declining business formation \u2014 remain. So will the public\u2019s desire for relief. <\/p>\n Here are actions the Legislature should take now to improve affordability for working families and job growth: <\/p>\n Broad-based relief. The Legislature should raise the personal exemption. Massachusetts is hardly progressive when it comes to taxing ordinary income. Our exemption has been frozen at $4,400 for single filers and $8,800 for married couples since 2008, reducing its real value by 55 percent<\/a>. <\/p>\n By contrast, North Carolina exempts $12,750 for single filers and $25,500 for married couples<\/a>. A couple earning $100,000 in Massachusetts pays tax on $91,200 of income, in North Carolina on $74,500. The difference is meaningful: $835 a year ($1,400 accounting for North Carolina\u2019s lower 3.99 percent tax rate). <\/p>\n Instead of broad-based relief, Beacon Hill relies on a patchwork of targeted \u2014 and hard to navigate \u2014 tax credits. Doubling the personal exemption and indexing it to inflation would provide meaningful relief to lower- and middle-income families. The cost of broad-based relief is $1.2 billion<\/a>. <\/p>\n Eliminate the estate tax. To stem the \u201cMass Exit\u201d of affluent residents, the Legislature should eliminate the estate tax. It drives investors and retirees elsewhere, along with their income, investment, and charitable giving. Most of the nation\u2019s fastest-growing states<\/a> have no estate tax, while seven of the 10 slowest-growing states do. <\/p>\n In 2023, the Legislature raised the estate tax exemption to $2 million. That did nothing to improve Massachusetts\u2019 competitive position. We remain one of 12 states with an estate tax. Most of our competitor states \u2014 including deep blue California \u2014 have none. If Beacon Hill wants to slow the outflow of capital and high-income taxpayers, repeal comes with a modest budget impact of about $500 million<\/a>. <\/p>\n Employers, investors, workers, and retirees have increasingly been voting with their feet because Massachusetts has become too expensive. Beacon Hill may wish away the problem but, unless it acts, talent and capital will continue to leave. And ballot initiatives will proliferate to fill the leadership void. <\/p>\n","protected":false},"excerpt":{"rendered":"None of this happened by chance. Our political class created the policies that have made Massachusetts unaffordable for…\n","protected":false},"author":2,"featured_media":57740,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[17],"tags":[435,33284,47582,9627,47583,5088,47584,47585,128,47586,37485,8277,22151,10863,19446,932,7166,47587,7641,47588,47589,3037,47590,550,27503,26310,47591,30021,1056,4446],"class_list":["post-57739","post","type-post","status-publish","format-standard","has-post-thumbnail","category-massachusetts","tag-art","tag-bills","tag-briefcase","tag-businessman","tag-cartoon","tag-cash","tag-chaos","tag-chaotic","tag-crime","tag-desperation","tag-dollar","tag-door","tag-doorway","tag-escape","tag-exit","tag-finance","tag-financial","tag-flee","tag-flight","tag-illustrated","tag-illustration","tag-massachusetts","tag-minimalist","tag-money","tag-pursuit","tag-running","tag-situation","tag-stress","tag-theft","tag-urgency"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/117424906759627224","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/posts\/57739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/comments?post=57739"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/posts\/57739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/media\/57740"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/media?parent=57739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/categories?post=57739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/thestates\/wp-json\/wp\/v2\/tags?post=57739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}