⚠️ Tax Competitiveness in Freefall
Tax Foundation rank dropped from #34 → #41 in two years after surtax passage
MA is 9th worst overall for tax competitiveness nationally
State spending grew 51% since FY2018 — income growth only 42%
FY2025 actual spending was $3.2B over the signed budget
Middle class ($103K–$160K) pays the highest effective rate at 10%
Only 13% of voters say they get good value for their tax dollars (MOA 2025)
Tax Foundation Competitiveness Sub-Rankings
Income Tax
#41
10th worst nationally
Property Tax
#46
5th worst nationally
UI Tax
#48
3rd worst nationally
Corporate Tax
#44
7th worst nationally
Sales Tax
#31
20th most competitive
Tax Competitiveness Index — Historical Rank
Source: Tax Foundation State Tax Competitiveness Index, 2020–2026
Effective Tax Rate by Income Bracket (ITEP)
Source: Institute on Taxation and Economic Policy "Who Pays?" 2024
📋 MA Tax Structure at a Glance
Massachusetts levies a 5% flat income tax, plus a 4% surtax on income over ~$1.08M (9% total). Sales tax is 6.25% with no local add-ons. Property taxes average $7,732/year for a single-family home. The state also imposes an estate tax (threshold: $1M), a real estate transfer tax, and one of the nation's most burdensome unemployment insurance tax systems. MA is an outlier in imposing a separate payroll tax for non-UI purposes.
Income Tax & "Millionaires Surtax"
Base Rate
5%
Flat on all income
Surtax Rate
+4%
On income > $1.08M
Top Combined Rate
9%
Short-term cap gains: 12.5%
FY2024 Surtax Revenue
$2.2B
Beat $1.5B estimate by 47%
FY2025 Surtax Revenue
~$3.0B
Double original projections
⚠️ The Surtax Squeeze
Passed by just 51% of voters in November 2022
Dismantled MA's formerly competitive flat income tax
Threshold rises with inflation: $1M → $1.053M → $1.083M
~27,000 taxpayers affected — a volatile revenue source
FY2026 budget shifts $496M in Chapter 70 to surtax funds — critics say "supplanting not supplementing"
Spending growth (20%) has outpaced revenue growth (6%) since surtax passage
Surtax Revenue Collections
Source: MA Department of Revenue; Snopes/WBUR verified figures
FY2026 Surtax Spending Allocation ($2.4B)
Source: MA FY2026 Budget, Fair Share Fund allocations
Effective State & Local Tax Rates by Income Bracket
| Income Bracket | Effective Rate | Notes |
|---|
| < $26,800 | 8.2% | Low income |
| $26,800 – $103,500 | 9.2 – 9.6% | Working/middle class |
| $103,500 – $160,000 | 10.0% | HIGHEST burden — upper middle class |
| $160,000 – $391,100 | 9.0% | Upper income |
| $391,100 – $1,000,600 | 7.9% | Lowest burden bracket |
| > $1,000,600 | 8.9% | Top 1% (post-surtax) |
Source: Institute on Taxation and Economic Policy (ITEP), "Who Pays?" 7th Edition, 2024
Property Tax
Avg SF Tax Bill
$7,732
FY2025 statewide
Avg SF Home Value
$700,615
FY2025 assessed
Total Property Levy
$24.0B
FY2026 — up $1.2B YoY
Total Assessed Value
$2.0T
First time over $2 trillion
National Rank
#46
5th worst (Tax Foundation)
Statewide Property Tax Levy Growth (FY2016–FY2026)
Source: MA Division of Local Services (DLS), FY2026 Tax Levies Report
Residential Tax Rates — North Shore Towns (per $1,000)
Source: MA DLS Certified Tax Rates FY2025
📋 Proposition 2½
Massachusetts law limits annual property tax levy growth to 2.5% plus new growth, unless voters approve overrides or exclusions. Despite this cap, the total statewide levy grew from $14.6B in FY2015 to $24.0B in FY2026 — a 64% increase. Rising assessed values drive higher bills even when rates stay flat. MA also taxes commercial property more heavily than residential, and levies both an estate tax and a real estate transfer tax.
Average SF Tax Bills by County — FY2025 (Median of Communities)
| County | Median Avg Tax Bill | vs. State Median |
|---|
| Norfolk | $10,200+ | Above |
| Middlesex | $9,500+ | Above |
| Plymouth | $7,800+ | Near median |
| Essex | $7,600+ | Near median |
| Worcester | $5,800+ | Below |
| Berkshire | $4,200+ | Well below |
Source: MA DLS FY2025 Average Single-Family Tax Bill Report. State median: $7,732.
State Budget & Spending
FY2025 Actual Spending
$64.0B
$3.2B over signed budget
FY2026 Signed Budget
$60.9B
Before supplementals
Growth Since FY2018
+51%
Signed budgets: $39B → $61B
Spending as % of Income
~9%
vs FL 6.9%, NC 4.5%
⚠️ Spending Outpaces Everything
State spending: +51% since FY2018. Taxpayer income growth: only +42%. Inflation: +26%
FY2025: signed at $57.8B, actual spending hit $64B with supplementals — expect FY2026 to follow same pattern
Education spending up 76% since 2018 — while enrollment declined 4%
Health & Human Services spending up 48% ($10.3B) — MassHealth enrollment up only 10%
Since surtax: spending growth 20% vs. revenue growth 6%
Technology Services budget up 337%, Energy/Environment up 113%, Labor up 108%
State Budget Growth: FY2018 – FY2026
Source: MA General Appropriations Act (GAA); Mass Opportunity Alliance; MA Taxpayers Foundation
Growth Comparison Since FY2018
Source: BLS CPI-U Boston, BEA Personal Income, MA Budget Office
Major Spending Categories — Growth Since FY2018
| Category | Growth | Context |
|---|
| Technology Services & Security | +337% | Fastest-growing department |
| Energy & Environmental Affairs | +113% | More than doubled |
| Labor & Workforce Development | +108% | More than doubled |
| Education (Executive Office) | +76% | Enrollment declined 4% |
| Health & Human Services | +48% | 2x medical care inflation (17%) |
| Legislature, Judiciary, Admin & Finance | +30–40% | ~$3B in total increases |
Source: Mass Opportunity Alliance analysis of GAA budgets, August 2025
How MA Compares to Competitor States
MA Spending / Income
~9.0%
Highest of competitors
FL Spending / Income
6.9%
No income tax
NH Spending / Income
6.9%
No income tax, no sales tax
NC Spending / Income
4.5%
Flat 4.5% income tax, declining
State Spending as % of Taxpayer Income
Source: Mass Opportunity Alliance, NASBO, BEA Personal Income 2025
Budget Growth Since FY2018 — Competitor States
Source: NASBO State Budget Reports; Mass Opportunity Alliance
Tax Structure Comparison — MA vs. Key Competitors
| State | Income Tax | Sales Tax | Tax Foundation Rank | Budget Growth (FY18–26) |
|---|
| Massachusetts | 5% + 4% surtax (9%) | 6.25% | #41 (9th worst) | +51.5% |
| New Hampshire | None | None | #6 | +39.0% |
| Florida | None | 6.0% | #4 | +42.5% |
| North Carolina | 4.5% flat (declining) | 4.75% | #11 | +41.7% |
| Texas | None | 6.25% | #13 | +40% |
| Tennessee | None | 7.0% | #8 | +38% |
Source: Tax Foundation 2026 State Tax Competitiveness Index; NASBO
⚠️ The Exodus Connection
MA's high-tax environment is a key driver of net domestic outmigration
Top destinations for MA leavers: FL, NH, TX, NC — all lower-tax states
Tax Foundation: MA surtax "dismantled the state's formerly competitive flat income tax"
NH ranks #6 nationally — best in New England — with no income or sales tax
The Real Cost of Living in Massachusetts
Every data point below is from official U.S. government sources — BEA, BLS, Census Bureau, EIA, DOL. No think tanks. No advocacy groups.
BEA Regional Price Parity
108.2
8.2% above national average (2023)
$100 Buys Only
$92.38
In real purchasing power
Electricity Rate
31.5¢/kWh
vs 18.05¢ national avg (EIA, Nov 2025)
Infant Childcare
$24K+/yr
#2 most expensive (DOL/EPI)
⚠️ The Purchasing Power Illusion — Official BEA Data
MA median household income: #1 at $113,900 (Census 2024 ACS) — but that's nominal dollars
BEA's RPP adjustment reduces purchasing power by 8.2% — MA drops from top tier when costs are factored in
MA per capita PCE: $69,101 — highest of any state (BEA 2023) — residents spend more because everything costs more
Boston CPI shelter costs up +4.0% YoY (BLS Nov 2025) — outpacing national shelter inflation
Electricity rates 75% above national average (EIA, Nov 2025) — highest in continental US
Cost to raise one child: $44,221/yr — #1 most expensive state (MIT Living Wage Calculator / SmartAsset 2025)
BEA Regional Price Parities — MA vs Competitor States (2023)
Source: U.S. Bureau of Economic Analysis, Regional Price Parities (FRED, Dec 2024)
What $100 Actually Buys — Purchasing Power by State
Source: BEA Regional Price Parities, 2023 (100 / RPP × 100)
ℹ️ What Is the BEA Regional Price Parity?
The U.S. Bureau of Economic Analysis (BEA) publishes Regional Price Parities (RPPs) that measure how much prices differ across states compared to the national average (100). An RPP of 108.2 means Massachusetts costs are 8.2% above the national average across all goods and services. The RPPs are built from BLS Consumer Price Index data and Census Bureau American Community Survey housing data — the most comprehensive official cost-of-living measure available. When applied to income, RPP-adjusted "real" income shows actual purchasing power.
EIA Residential Electricity Rates — MA vs Selected States (¢/kWh, Nov 2025)
Source: U.S. Energy Information Administration, Electric Power Monthly (Nov 2025)
Annual Cost of Infant Childcare by State
Source: Economic Policy Institute / DOL; SmartAsset 2025 (MIT Living Wage Calculator)
The MA Cost Burden — Official Government Data
| Category | Massachusetts | US Average | MA Premium | Source |
|---|
| Overall Cost of Living (RPP) | 108.2 | 100.0 | +8.2% | BEA (2023) |
| Residential Electricity | 31.5¢/kWh | 18.05¢/kWh | +75% | EIA Electric Power Monthly (Nov 2025) |
| Median Household Income | $113,900 | $80,610 | +41% nominal | Census ACS (2024) |
| After RPP Adjustment | ~$105,268 | $80,610 | +31% real | BEA-adjusted |
| Infant Childcare (annual) | $24,000+ | $14,802 | +62% | EPI / DOL |
| Cost to Raise 1 Child (annual) | $44,221 | $27,743 | +59% | SmartAsset / MIT (2025) |
| Boston CPI – Shelter (YoY) | +4.0% | +3.6% | Above US | BLS (Nov 2025) |
| Boston CPI – All Items (YoY) | +2.8% | +2.7% | Above US | BLS (Nov 2025) |
| C2ER Housing Index | 196.2 | 100.0 | +96% | C2ER / BLS (2025) |
| C2ER Utilities Index | 153.2 | 100.0 | +53% | C2ER / EIA (2025) |
📊 The Middle-Class Squeeze — By the Numbers
A MA family of 4 earning the state median ($113,900) spends ~$44K on one child — that's 39% of gross income before taxes
Federal affordability benchmark for childcare: 7% of income. MA families pay 18-20% — nearly 3x the benchmark
Two children in center-based care: ~$40,000/yr — more than average in-state college tuition (EPI)
After 5% income tax, ~10% effective property tax burden, and 8%+ cost premium, a $113K salary in MA buys what ~$85-90K buys in NC or TX
MA electricity costs $167/month average — vs ~$147 national average — an extra $240+/year just on power (EIA)
Boston-area rents: owners' equivalent rent up +4.4% YoY even as national shelter inflation slows (BLS Nov 2025)
MA Cost of Living Premium Over Time (BEA RPP)
Source: FRED / BEA, MARPPALL (2008–2023)
Income vs Actual Purchasing Power — State Comparison
Source: Census ACS 2024 (median HH income) adjusted by BEA RPP (2023)
ℹ️ Data Sources — All Official U.S. Government
BEA (Bureau of Economic Analysis): Regional Price Parities, Real Personal Income, Per Capita PCE — the federal government's official cost-of-living comparison tool.
BLS (Bureau of Labor Statistics): Consumer Price Index for Boston-Cambridge-Newton MSA, bimonthly series.
Census Bureau: American Community Survey (ACS) median household income, housing cost data.
EIA (Energy Information Administration): State-level residential electricity prices, Electric Power Monthly.
DOL / EPI: Childcare cost data compiled from state licensing data and provider surveys.
MIT Living Wage Calculator: Used by SmartAsset for state-level child-rearing cost estimates.
Public Benefits Fraud — What's Detected vs. What Exists
Massachusetts spends $4.5B+ on public benefits annually. The state catches $11–13M in fraud. The national benchmark suggests 10–20× more goes undetected.
Annual Fraud Detected
$11–13M
BSI official figures
Detection Rate
0.24%
Of total benefit spending
National Fraud Rate
3–5%
Federal benchmark
Estimated Actual Fraud
$135–225M
Based on national rates
Under-Detection
12–20×
Gap vs. national benchmarks
⚠️ The Detection Gap — By Design
BSI examines 0.07% of benefit recipients — of those examined, 6.6% are confirmed fraud
BSI has ~15–20 investigators for 2.2 million benefit recipients statewide
Return on investment: $6.17 detected per $1 spent on investigation — yet staffing hasn't increased
Gov. Healey's administration refused to share SNAP data with USDA (November 2024)
MA is the only state where the governor's office, judiciary, and legislature are all exempt from public records law
Emergency shelter costs $3,870/week per family — national average: $700–$1,050/week (3.7–5.5× higher)
Fraud Detected vs. Estimated Actual Fraud (Annual)
Source: MA State Auditor BSI Reports (FY2023–FY2025); USDA-FNS SNAP Trafficking Studies (national rates)
BSI Fraud Detection by Program — FY2025
Source: MA State Auditor, Bureau of Special Investigations FY2025 Annual Report
Estimated Fraud by Program — Conservative (3%) vs. Moderate (5%)
| Program | Annual Spending | Est. Fraud (3%) | Est. Fraud (5%) | Detected |
|---|
| Emergency Shelter | $900M | $27M | $45M | Minimal |
| SNAP | $2,500M | $75M | $125M | $690K |
| MassHealth (immigrant) | $450M | $13.5M | $22.5M | $3.8M |
| Cash Welfare (TAFDC/EAEDC) | $300M | $9M | $15M | $32K |
| Childcare (EEC) | $200M | $6M | $10M | $135K |
| Other | $200M | $6M | $10M | — |
| TOTAL | $4,550M | $136.5M | $227.5M | $11M |
Source: MA State Auditor BSI (detected); program spending from MA FY2025 Budget; fraud rate estimates based on USDA-FNS, GAO, and LexisNexis True Cost of Fraud studies
What Massachusetts Doesn't Do — vs. Other States
Source: GAO Report on SNAP fraud (2019); state program comparisons
BSI Detected Fraud — FY2015 to FY2025
Source: MA State Auditor, Bureau of Special Investigations Annual Reports
Verification System Comparison — MA vs. Other States
| Verification Method | Massachusetts | Florida | Texas | Impact |
|---|
| IRS Income Cross-Check | ❌ No | ✅ Yes | ✅ Yes | Catches hidden income |
| Biometric Enrollment | ❌ No | ❌ No | ✅ Yes | Prevents duplicate enrollment |
| Interstate Database Check | ❌ No | ✅ Yes | ✅ Yes | Prevents multi-state fraud |
| USDA Data Sharing | ❌ Refused | ✅ Yes | ✅ Yes | Federal oversight cooperation |
| Work Requirement Enforcement | ❌ Waived | ✅ Yes | ✅ Yes | Reduces dependency fraud |
| Home Visit Verification | ❌ No | ❌ No | ❌ No | Confirms residency |
Source: GAO SNAP Fraud Report (2019); USDA-FNS; state program documentation; Gov. Healey USDA data refusal (Nov 2024)
💰 The Cost of Doing Nothing — Potential Savings
Income verification (IRS cross-check): estimated savings $30–50M/year
Biometric enrollment: estimated savings $15–25M/year
Interstate database: estimated savings $10–20M/year
Increase BSI staff (15 → 50–100 investigators): estimated additional detection $50–100M/year
Total potential savings: $105–195M/year at an implementation cost of $10–15M
Every $1 of fraud costs taxpayers $3.72 when investigation and admin costs are included (LexisNexis)
📋 Why Detection Is So Low
Massachusetts relies on self-reported income for benefit eligibility — no IRS cross-check, no SSA cross-check, no employer verification. The Bureau of Special Investigations has roughly 15–20 investigators for 2.2 million benefit recipients, yet every dollar spent on investigation returns $6.17 in detected fraud. The state refused to share SNAP recipient data with the USDA in November 2024, and Massachusetts remains the only state in the country where the governor's office, judiciary, and legislature are all exempt from public records law — making independent oversight nearly impossible.
ℹ️ Data Sources
MA State Auditor: Bureau of Special Investigations (BSI) Annual and Quarterly Reports (FY2015–FY2025).
USDA-FNS: SNAP Trafficking Studies — national fraud rate benchmarks.
GAO: Government Accountability Office report on SNAP fraud detection (2019).
LexisNexis: True Cost of Fraud™ Study for SNAP Agencies — $3.72 multiplier.
New England First Amendment Coalition: MA public records law exemption analysis.
Gov. Healey / USDA: SNAP data sharing refusal (November 2024).