Report: Wealthy Households Stay in MA Despite Higher Taxes
Wealth management concept, business man and team analyzing financial statement for planning financial customer case in office.
Kathryn Carley – Commonwealth News Service
Higher tax rates for high-income households in Massachusetts are not causing them to leave the state, according to IRS data in a new report from the Massachusetts Budget and Policy Center.
In fact, the out-migration rate of households in Massachusetts earning more than $200,000 a year between 2011 and 2020 was lower than forty other states.
Kurt Wise, tax policy analyst at the center, said tax changes have little impact on where wealthy households choose to live.
“What you see is very modest net out-migration over that period, something like 48,000, which is 0.1%,” Wise reported.
Wise noted both Gov. Maura Healy and the state House Ways and Means Committee have proposed similar tax packages with significant and regressive tax cuts for the wealthy. He hopes lawmakers can incorporate the latest data on out-migration into their decision-making.
Supporters of greater tax cuts for the wealthy say they are needed to prevent a mass exodus of high-income households from the state. Opponents of Massachusetts’ new “millionaire’s tax“ have made the same claim.
Wise argued the greater concern is the ability of lower- and middle-income households to afford to stay.
“When you cut taxes, you can’t actually invest in things that are driving some people to move out and limiting a number of people moving in,” Wise contended.
Wise added revenue losses from tax cuts will impede the Commonwealth’s ability to address the high cost of housing, child care and postsecondary education, as well as unreliable public transportation.