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Massachusetts’ Graduated Income Tax
Amendment Threatens the Commonwealth’s
• Massachusetts’ tax advantage in New England is primarily driven by its
competitive individual income tax rate and its sales and use tax structure.
• The graduated income tax amendment would be paid by many small
businesses, in addition to wealthy individuals.
• The proposed surtax is likely to have negative economic effects that will
impact low- and middle-income earners.
If approved, the graduated income tax could contract the Massachusetts
economy by $6 billion by end of 2025.
• Massachusetts has seen net outmigration of adjusted gross income (AGI)
since 1993, resulting in $23 billion of AGI flowing to other states.
• Florida and New Hampshire, two states with no individual income tax,
are consistently the top destinations for net outmigration of AGI from
• The graduated income tax amendment is likely to exacerbate the net
outmigration of AGI from Massachusetts as taxpayers adjust their behaviors
to the tax increase.
• Responding to potential negative economic effects of the surtax by repealing
or adjusting the rate would require another constitutional amendment, which
would take years to accomplish.
Senior Policy Analyst
TAX FOUNDATION | 2
This November, Massachusetts voters will decide whether the state’s constitution should be
amended to transition the Commonwealth from a flat rate individual income tax to a graduated rate