Massachusetts Tax Burden & State Budget

⚠️ 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

Flat on all income

Surtax Rate

+4%

On income > $1.08M

Top Combined Rate

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).

⚠️ Massachusetts Is Hemorrhaging Taxpayers & Wealth

Net loss of 184,719 tax returns (filers) from 2011–2023 — 2022-23 data now released

Net AGI outflow of $24.7 billion over 12 years (money amounts in thousands)

Net outflow peaked at 26,326 returns (2021-22); 2022-23 shows 16,921 — but AGI loss deepened to $4.18B

Florida is the #1 destination: $2.9B AGI left for FL in 2021-22 alone

Net AGI loss hit $4.18B in 2022-23 — second worst ever; $4.3B in 2020-21 remains worst

MA loses more filers to FL, NH, NY, CA, RI, and CT — pattern unchanged in 2022-23

12-Year Migration Summary (2011–2023)

Cumulative Net Outflow

-184,719

Tax returns (filers) lost 2011–2023

Cumulative Net AGI Loss

-$24.7B

Adjusted Gross Income lost (in $K)

2022-23 Net Outflow

-16,921

Filer loss; AGI loss deepened to $4.18B

2022-23 Net AGI Loss

-$4.18B

2nd worst ever; $1.54 out per $1 in

Net Migration (Tax Returns) — 2011 to 2023

Source: IRS Statistics of Income — State-to-State Migration Data

Net AGI Flow ($K) — 2011 to 2023

Source: IRS Statistics of Income — State-to-State Migration Data

Top 10 Outflow Destinations by AGI (2022-23) ★

Source: IRS SOI State-to-State Migration, Calendar Years 2021-2022

Top 10 Inflow Origins by AGI (2022-23) ★

Source: IRS SOI State-to-State Migration, Calendar Years 2021-2022

Outflow vs Inflow — Tax Returns by Year

Source: IRS Statistics of Income — State-to-State Migration Data

Outflow vs Inflow — AGI ($K) by Year

Source: IRS Statistics of Income — State-to-State Migration Data

Year-by-Year Migration Data — Massachusetts

Tax Year	Outflow Returns	Inflow Returns	Net Returns	Outflow AGI ($K)	Inflow AGI ($K)	Net AGI ($K)
2011-12	75,810	69,756	-6,054	$5,263,200	$4,345,144	-$918,056
2012-13	77,705	71,265	-6,440	$6,007,613	$4,995,428	-$1,012,185
2013-14	75,295	64,653	-10,642	$5,445,749	$4,684,977	-$760,772
2014-15	56,998	49,424	-7,574	$4,409,835	$3,561,556	-$848,279
2015-16	81,828	66,581	-15,247	$6,844,341	$5,425,339	-$1,419,002
2016-17	108,721	88,611	-20,110	$9,090,923	$7,193,129	-$1,897,794
2017-18	86,746	71,861	-14,885	$7,584,423	$6,082,734	-$1,501,689
2018-19	85,889	70,985	-14,904	$7,738,005	$6,287,624	-$1,450,381
2019-20	94,318	73,879	-20,439	$9,519,489	$6,964,488	-$2,555,001
2020-21	98,989	73,812	-25,177	$11,581,383	$7,284,191	-$4,297,192
2021-22	104,472	78,146	-26,326	$13,202,799	$9,331,863	-$3,870,936
2022-23 ★	102,076	85,155	-16,921	$11,877,573	$7,701,622	-$4,175,951

Source: IRS Statistics of Income — State-to-State Migration Data, Calendar Years 2011-2022. Money amounts in thousands of dollars.

Top Outflow Destinations — Where MA Filers Went (2022-23) ★

Rank	Destination	Returns (Filers)	Individuals	AGI ($K)
1	Florida	12,159	19,927	$2,541,416
2	New Hampshire	10,603	16,174	$1,428,201
3	New York	11,027	13,534	$1,062,862
4	California	7,767	10,215	$903,230
5	Rhode Island	6,510	9,613	$571,899
6	Connecticut	6,006	8,873	$519,656
7	Texas	4,218	6,913	$465,759
8	Maine	3,330	4,870	$378,057
9	North Carolina	3,483	5,780	$347,702
10	New Jersey	3,048	4,265	$326,814

Source: IRS SOI State-to-State Migration Outflow, Calendar Years 2022-2023 ★ New

Top Inflow Origins — Where MA's New Filers Came From (2022-23) ★

Rank	Origin	Returns (Filers)	Individuals	AGI ($K)
1	New York	10,479	14,158	$1,047,036
2	California	6,565	9,037	$825,498
3	Florida	8,058	12,048	$666,088
4	New Hampshire	6,594	9,174	$557,595
5	Connecticut	6,467	8,711	$556,383
6	Rhode Island	5,218	7,558	$386,682
7	New Jersey	3,596	4,973	$346,234
8	Texas	3,394	5,207	$322,656
9	Pennsylvania	3,335	4,493	$286,389
10	Illinois	2,201	3,044	$237,652

Source: IRS SOI State-to-State Migration Inflow, Calendar Years 2022-2023 ★ New

The Surtax Paradox: Collecting More, Losing More

💰 Without the Surtax, the Budget Doesn't Balance

FY2025 signed budget: $57.8B — actual spending hit $64.0B (+$6.2B over budget)

FY2024 non-surtax revenue missed benchmarks by $233M — the surtax papered over the gap

Surtax collected $5.7B cumulative (FY24–FY25) — but net AGI outflow was $8.2B in those same migration years

State spending grew 51% since FY2018 while base tax revenue growth stalled at ~6% post-surtax

The 2022-2023 IRS migration data is now released — first full year with surtax in effect

2022-23 confirms the pattern: net AGI loss of $4.18B — surtax collecting from a shrinking base

Surtax Revenue (FY24+FY25)

+$5.2B

$2.2B + $3.0B collected

Net AGI Outflow (2020-22)

-$8.2B

$4.3B + $3.9B lost to migration

FY25 Actual vs. Budget

+$6.2B

$64B spent vs. $57.8B signed

FY26 Budgeted Surtax

$2.4B

Already baked into $60.9B budget

Surtax Revenue vs. Net AGI Outflow

Source: MA DOR (surtax revenue); IRS SOI (migration AGI). Note: Surtax = fiscal year; Migration = calendar year. 2022-23 migration data pending IRS release.

Budget Growth vs. Base Revenue: The Widening Gap

Source: MA DLS (budget); MA DOR (revenue); FY2025 actual spending per House Ways & Means

Surtax Collections vs. Migration AGI Loss — Side by Side

Period	Surtax Collected	Net AGI Outflow (IRS)	Net Balance	Budget (Signed)	Budget (Actual)
FY2024 / CY 2021-22	+$2.2B	-$3.9B	-$1.7B	$56.2B	—
FY2025 / CY 2020-21	+$3.0B	-$4.3B	-$1.3B	$57.8B	$64.0B
FY2026 / CY 2022-23 ★	$2.4B (est.)	-$4.18B (IRS released)	-$1.78B	$60.9B	—
Cumulative	+$5.7B	-$24.7B (12yr)	-$19.0B	Spending ↑51% since FY18

Source: MA DOR, MA DLS, House Ways & Means, IRS SOI Migration Data. Surtax = fiscal year collections. AGI outflow = calendar year IRS migration data (thousands $). CY 2022-23 data expected from IRS.

📊 Why the 2022-23 IRS Data Matters

The 2022-2023 migration data — when released by the IRS — will be the first full tax year where the 4% surtax was in effect (effective Jan 1, 2023). It will show whether the surtax accelerated high-earner outmigration beyond the already-record levels of 2020-22. If net AGI outflow exceeds $4B again, it would mean the state is losing more wealth to migration than it collects from the surtax — a structural problem no amount of tax increases can fix. The surtax may have been necessary to balance the budget in the short term, but the question is whether it's sustainable as the tax base continues to shrink.

ℹ️ About This Data

Source: IRS Statistics of Income (SOI) — State-to-State Migration Data, derived from individual income tax returns. A "return" represents a single tax filing (individual or joint), and "individuals" includes all exemptions claimed. AGI figures are in thousands of dollars.

Methodology: The IRS identifies migration by comparing filing addresses year-over-year. If a filer's address state changes between tax years, they are classified as a migrant. This captures approximately 95% of the filing population. "Net" figures = Inflow minus Outflow (negative = more people/money leaving MA).

Key context: The 2014-15 dip in volume reflects an IRS methodology change (switch from exemptions-based to dependent-based counting). The post-2019 acceleration coincides with COVID-era remote work migration and the passage of the "Millionaires Surtax" in 2022. ★ 2022-23 data added March 2026.

Are Wealthy People Leaving Massachusetts?

2022–2023: People leaving MA earned ~29% more on average than people moving in — the biggest gap in over a decade.

Data through IRS SOI March 2026 release · Next major update expected March 2027

Every year the IRS tracks who filed taxes in Massachusetts and what happened to them — did they stay, move in, or move out? This page looks at whether the people leaving Massachusetts are richer than the people arriving, and whether that changed after the new millionaires tax kicked in January 2023.

📊 The Short Version

In 2022-23, the average person leaving Massachusetts earned $116,360. The average person moving in earned only $90,440. That's a gap of nearly $26,000 per household.

That $26,000 gap is the biggest we've ever seen — and it showed up in the very first year the new 4% surtax was in effect. Earners over $200K drove an estimated 70% of the $4.2B net income lost in 2022-23 (Pioneer Institute analysis of IRS data).

For the 10 years before the surtax, the people leaving and arriving earned roughly the same amount. Migration was basically income-neutral.

The number of Massachusetts residents who are in the top 1% of earners grew steadily from 29,951 in 2013 to 32,795 in 2022 — but we don't yet have the 2023 numbers to see if that changed.

To be in the top 1% of Massachusetts earners in 2022, you needed to make at least $891,100 a year — up from $579,500 in 2013.

Important: We're still waiting on two key data releases from the IRS before we can say for certain what's happening. See the note at the bottom of this page.

Avg Income — People Leaving MA (2022-23)

$116,360

Per household that moved out

Avg Income — People Moving Into MA (2022-23)

$90,440

Per household that moved in

How Much Richer Are the Leavers?

29% more

Biggest gap in 10 years — first year of new surtax

Top 1% Earners Still in MA (2022)

32,795

Growing steadily — but 2023 data not yet out

Income of movers · Massachusetts · 2022–2023

Moving
in

$90,440

per
household

Moving
out

$116,360

+$25,920

per
household

Arrives

$1.00

Departs

$1.29

For every $1.00 of income moving into Massachusetts, $1.29 walks out the door — the widest gap in over a decade, first appearing the year the surtax took effect.

Average Income: People Leaving MA vs. People Arriving (2013–2023)

When the two lines are close together, migration is income-neutral — roughly similar earners moving in and out. When the red line rises above the green, wealthier people are leaving than arriving. The gap spiked in 2022-23, the first year of the surtax. Source: IRS migration data.

How Much Richer Are the People Leaving? (% gap, each year)

A bar at 0% means leavers and arrivers earn the same. A bar at +28.7% means leavers earn 29% more on average than the people moving in. The dark red bar in 2022-23 is the highest in the entire 10-year record. Source: IRS migration data.

How Many Top-1% Earners Live in Massachusetts? (2013–2022)

This counts the number of Massachusetts tax filers in the top 1% of earners each year. The number has been growing — but the 2023 data hasn't been released yet. That's the key number to watch. Source: IRS resident income data.

How Much Do You Need to Earn to Be in the MA Top 1%? (2013–2022)

This is the minimum income needed to crack the top 1% of Massachusetts earners. It's been rising because high earners' incomes have grown — not because top earners are disappearing. Again, 2023 data not yet available. Source: IRS resident income data.

We'll get a clearer picture when the IRS releases resident income data for 2023 (later this year) and migration data for 2023–2024 (likely around March 2027). Check back then for updates.

Every Year Side by Side: Income of People Leaving vs. Arriving

Year	Avg Income — Leaving MA	Avg Income — Moving Into MA	Difference	New surtax in effect?
2013-14	$72,300	$72,500	Nearly identical — no gap	No
2014-15	$77,400	$72,100	Leavers earn 7% more	No
2015-16	$83,600	$81,500	Leavers earn 3% more	No
2016-17	$83,600	$81,200	Leavers earn 3% more	No
2017-18	$87,400	$84,600	Leavers earn 3% more	No
2018-19	$90,100	$88,600	Leavers earn 2% more	No
2019-20	$100,900	$94,300	Leavers earn 7% more	No
2020-21	$117,000	$98,700	Leavers earn 19% more — COVID remote-work surge	No
2021-22	$126,400	$119,400	Leavers earn 6% more	No
2022-23 ★	$116,400	$90,400	Leavers earn 29% more ← biggest gap ever recorded	YES — started Jan 2023

Source: IRS state-to-state migration data, 2013–2023. Each row is one tax year. ★ = first year the new 4% surtax on income over ~$1M was in effect. The estimate that $200k+ earners account for ~70% of net AGI outflow is consistent with Pioneer Institute and NTU Foundation analyses of the March 2026 IRS release.

Massachusetts Top 1% Earners — What Does That Even Mean?

Year	Total MA Tax Filers	How Many Are in the Top 1%	Minimum Income to Qualify	What % of All MA Income Do They Earn?
2013	2,995,062	29,951	$579,500/yr	21.0%
2014	3,036,855	30,369	$632,500/yr	22.8%
2015	3,083,067	30,831	$649,800/yr	22.7%
2016	3,096,292	30,963	$655,700/yr	21.6%
2017	3,140,912	31,409	$698,300/yr	23.7%
2018	3,174,445	31,744	$740,000/yr	23.3%
2019	3,169,490	31,695	$765,800/yr	22.3%
2020	3,346,624	33,466	$777,100/yr	23.5%
2021	3,259,802	32,598	$988,300/yr	30.0%
2022	3,279,466	32,795	$891,100/yr	23.1%
2023 — not yet released	The IRS hasn't published this yet. This is the number that will tell us whether top earners actually started leaving after the surtax hit.

Source: IRS resident income data, 2013–2022. The "top 1%" just means the highest-earning 1% of all Massachusetts tax filers that year — about 30,000–33,000 people. They collectively earn roughly 21–23% of all income reported in the state.

Three Risks the Numbers Are Hinting At

⚖️ Risk 1 — The State Is Putting More Weight on Fewer Shoulders

About 32,800 people — the top 1% of Massachusetts earners — collectively earn 23% of all income in the state. The new surtax depends heavily on this same small group. That makes the state budget unusually sensitive to their decisions about where to live.

If just 5% of them leave (roughly 1,600 people), Massachusetts could lose an estimated $367 million in annual income tax revenue. If 10% leave, that rises to $735 million — more than a quarter of the entire surtax the state collected in FY2025.

Revenue at risk if top-1% leave

$367M

if 5% leave
(~1,600 people)

$735M

if 10% leave
(~3,300 people)

Based on avg top-1% income of $2.97M and current MA tax rates. 2022 IRS data.

👻 Risk 2 — The Tax Revenue Massachusetts Never Gets to Collect

Most high earners hold the majority of their wealth not in paychecks, but in things they have not sold yet — a company stake, an investment portfolio, a home that has tripled in value. Massachusetts can only tax those gains when the person actually sells.

If a high earner moves to a no-income-tax state before that sale happens, Massachusetts collects zero on what might be the single largest financial event of that person's life. By the time the IRS migration data shows them as "gone," the window has already closed.

Caveat: There is no public data on unrealized gains held by people who have moved, so this cannot be measured directly. But it is worth understanding: the 29% income gap we can measure may be the smaller part of the wealth quietly leaving Massachusetts.

🧩 Risk 3 — It Is Not Just About the Rate. It Is About Predictability.

For decades Massachusetts had a simple flat income tax — everyone paid 5%, full stop. High earners knew exactly what they owed. In 2023 that changed: anyone earning over about $1 million now pays an extra 4% on top, and that threshold adjusts each year with inflation.

The evidence suggests people are not just chasing lower rates — they are moving to simpler, more predictable tax structures. A business owner who might earn $800K one year and $2M the next faces very different tax planning in Massachusetts than they did five years ago.

Massachusetts has effectively introduced a predictability penalty — the added cost and uncertainty of managing a variable tax rate on top of an already-high base rate. For high earners, that complexity is itself a reason to simplify by moving.

Three-Model Consensus ⓘ

Claude · Grok · Gemini · March 2026

Strongest signal

The 28.7% wealth premium for 2022-23 leavers is the clearest sign of high-earner-skewed outmigration in a decade of records.

The trend

Outflow is becoming more concentrated among higher earners — the $200K+ group accounts for an estimated 70% of the net income lost.

What to watch

The 2023-24 migration data (expected March 2027) will determine whether 2022-23 was a one-time spike or the start of an accelerating trend.

This section reflects independent agreement across three AI models reviewing the same IRS data. It does not constitute a political endorsement. All figures from official IRS Statistics of Income sources. Revenue-at-risk estimates are based on 2022 income data and current tax rates, and are clearly marked as estimates.

⚠️ What We Know, What We Don't, and What We're Still Waiting For

What we know: In the first year of the surtax (2022-23), people leaving Massachusetts earned 29% more on average than people arriving — the biggest gap in a decade of records. That's a real and unusual signal.

What we don't know yet: We don't have the 2023 resident data, so we can't confirm that the number of wealthy people living in Massachusetts actually went down. It's possible they left and were replaced. The migration data tells us about movement — not about whether the total pool shrank.

Think of it this way: Imagine your neighborhood's block party budget. If the families with the biggest contributions keep moving away — taking their paychecks with them — things get tighter for everyone, even if the total number of houses stays about the same. That's what the data is hinting at for Massachusetts right now.

What to watch for: Two IRS datasets will answer this definitively. The 2023 in-state income data (expected sometime in 2025 or 2026) will show if fewer top earners filed from a Massachusetts address. The 2023-24 migration data (likely released around March 2027) will show if the trend continued into a second year. Until then, the 29% gap is the strongest evidence we have — suggestive, but not yet conclusive.

Who Actually Funds Massachusetts?

A breakdown of income taxes, capital gains, and economic activity by earnings percentile. Source: IRS SOI In-State AGI Shares, tax year 2022.

The top 1% of MA earners — about 32,800 people — pay more in state income taxes than the bottom 75% combined.

Which Group Is Hit Hardest?

The answer depends on what kind of impact you mean. Each income group faces a different squeeze — and they compound on each other.

Most squeezed overall

Upper Middle Class
$104K – $233K

📊 Pays the highest effective tax rate of any group — 10% all-in, more than millionaires
🚫 Not hit by the surtax — but gets no low-income credits either
🏠 Fully exposed to the 8.2% cost-of-living premium with no cushion
📦 If top earners leave, this group is next in line to absorb the fiscal gap
❌ Too rich for benefits, too middle to just move

Most regressive burden

Working Class
$32K – $65K

💸 Pays 1.4–2.1% of income toward immigration shelter costs — the most regressive share of any group
🏘️ Concentrated in inner-ring cities bearing the direct service burden
🏠 Competes with new arrivals for housing, entry-level wages, and services
⚡ Electricity, childcare, and rent consume a much larger share of income than for higher earners
📉 If state revenue falls, their neighborhood services are cut first

Most in absolute dollars — but most mobile

Top 1%
Over $891K

💰 Average $225,000+ in MA state income taxes per year — per person
➕ New surtax adds 4% on every dollar over $1.08M
✈️ Unlike other groups, they can leave — and the data shows they are
📊 Pays 27% effective state income tax rate — nearly 3× the median filer
🔄 Their departure transfers the burden downward to the groups above

Most dependent on stability

Bottom 25%
Under $32K

✅ Pay only 0.4% of all MA income taxes — largely insulated from income tax directly
🏥 Most dependent on MassHealth, housing vouchers, SNAP, and transit
⚠️ If high earners leave and state revenue shrinks, their services are cut
🔗 Indirectly exposed: everything they depend on is funded by the groups above them
📊 Most impacted by inflation and housing, not income tax

The cascade effect — what happens when top earners leave

Top 1% leaves → $367–735M revenue gap opens up

↓

State raises taxes or cuts services to fill gap

↓

Upper middle class ($104K–$233K) absorbs higher burden — already paying the highest effective rate

↓

Working class sees service cuts and housing/cost pressure worsen

↓

Bottom 25% loses services they depend on but can't replace

The departure of high earners doesn't just hurt the wealthy — it cascades downward. The upper middle class is squeezed first (higher taxes, same costs). The working class loses services and faces more competition for housing. The bottom 25% lose the safety net that the whole system was funding. Everyone loses, but in different ways and at different speeds.

Effective Tax Rate by Income Group — Who Actually Pays the Most? (2022)

Source: ITEP "Who Pays?" 2024 (all state+local taxes) and IRS SOI (income tax only). The upper middle class pays more as a share of income than millionaires — a quirk of the flat income tax combined with regressive property and sales taxes.

Immigration Cost Burden vs. Income Tax Share — The Double Squeeze

Source: ITEP / BU Study (immigration cost burden); IRS SOI (income tax share). The working class bears a disproportionate share of immigration costs while the upper middle class bears the heaviest income tax burden relative to income.

Top 1% share of MA income taxes

38.2%

~32,800 people paying more than 2.46M people combined

Top 5% share of MA income taxes

58.8%

~164,000 people

Bottom 50% share of MA income taxes

3.9%

~1.64 million filers, avg income $32,188

Top 1% share of all capital gains

76.0%

Investment & wealth activity is even more concentrated

Share of all Massachusetts income tax paid · 2022 · Each bar = one group of filers

Top 1%

32,800 people

38.2%

avg $2.97M

Next 4% (1–5%)

131,000 people

20.6%

avg $508K

Next 5% (5–10%)

164,000 people

11.0%

avg $281K

Next 15% (10–25%)

492,000 people

15.7%

avg $169K

Next 25% (25–50%)

820,000 people

10.6%

avg $91K

50–75%

820,000 people

3.5%

avg $48K

Bottom 25%

820,000 people

0.4% · avg $16K

The top 5% of earners — about 164,000 people — pay 58.8% of all Massachusetts income taxes. The bottom half of all filers — 1.64 million people — pay just 3.9% combined. This isn't unusual nationally, but it makes Massachusetts unusually exposed: a tiny group of mobile, high-income residents is carrying most of the fiscal load.

Share of MA Income Taxes by Percentile Band (2022)

Source: IRS SOI In-State AGI Shares, 2022. "Effective rate" = income taxes paid ÷ AGI.

Top 1% Share of MA Income Taxes — Trend 2013–2022

Source: IRS SOI In-State AGI Shares, 2013–2022. The 2021 spike reflects extraordinary capital gains realizations in a bull market year.

Economic Activity by Percentile — Capital Gains, Business Income, Dividends (2022)

Source: IRS SOI In-State AGI Shares. Capital gains = actual sales of stocks/property/business. S-corp = business ownership income. Dividends = investment portfolio income.

Effective Tax Rate by Band — What % of Income Goes to MA Taxes? (2022)

Source: IRS SOI In-State AGI Shares. State income tax only — does not include property tax, sales tax, or federal taxes. The top 1% effective rate jumped post-surtax (2023+).

Complete Breakdown — Every Percentile Band (Tax Year 2022)

Who	How Many	Avg Income	% of All MA Income	% of All MA Taxes	Effective Tax Rate
Top 1%	32,795	$2,972,000	23.1%	38.2%	27.3%
Next 4% (1–5%)	131,178	$508,000	15.8%	20.6%	21.6%
Next 5% (5–10%)	163,974	$281,000	10.9%	11.0%	16.7%
Next 15% (10–25%)	491,920	$169,000	19.8%	15.7%	13.1%
Next 25% (25–50%)	819,866	$91,000	17.8%	10.6%	9.9%
50–75%	819,867	$48,000	9.3%	3.5%	6.2%
Bottom 25%	819,866	$16,000	3.2%	0.4%	2.0%
All MA Filers	3,279,466	$128,000 avg	100%	100%	—

Source: IRS SOI In-State AGI Shares, tax year 2022. State income tax only. Effective rate = taxes paid ÷ AGI. Note: the apparent "regressive" rate for 10–25% vs top 1% reflects the flat 5% rate — the top 1% effective rate is higher because of capital gains and other income taxed at higher rates.

Economic Activity Concentration — Top 1% and 10% Share of Key Income Types (2022)

Income Type	What It Represents	Top 1% Share	Top 5% Share	Top 10% Share
Capital Gains	Profits from selling stocks, property, businesses	76.0%	88.6%	93.1%
S-Corp / Business Income	Income from owning a business	69.8%	87.7%	92.9%
Dividends	Income from investment portfolios	45.3%	64.6%	74.1%
Interest Income	Savings, bonds, lending	51.8%	65.4%	72.6%
Salaries & Wages	Regular employment income	11.6%	27.1%	38.9%
Total AGI	All income combined	23.1%	38.9%	49.8%

Source: IRS SOI In-State AGI Shares, 2022. Salary/wages are the most evenly distributed income type. Capital gains and business income are almost entirely held by the top 10%.

What Income Level Puts You in Each Group? — Massachusetts 2022

Percentile Group	Income Range	Average Income	% of MA Taxes	Plain English
Top 1%	Over $891,118	$2,972,000	38.2%	~32,800 people. Mostly business owners, investors, senior executives, high-paid professionals.
Top 1–5%	$349,399 – $891,118	$508,000	20.6%	~131,000 people. Senior doctors, lawyers, finance professionals, tech leads.
Top 5–10%	$232,957 – $349,399	$281,000	11.0%	~164,000 people. Dual-income professional households, mid-level executives, specialists.
Top 10–25%	$127,196 – $232,957	$169,000	15.7%	~492,000 people. Upper-middle class. Managers, engineers, teachers with dual incomes.
Top 25–50%	$65,279 – $127,196	$91,000	10.6%	~820,000 people. Middle class. Nurses, tradespeople, office workers, single earners.
50–75%	$32,457 – $65,279	$48,000	3.5%	~820,000 people. Working class. Retail, food service, part-time workers, young earners.
Bottom 25%	Under $32,457	$16,000	0.4%	~820,000 people. Very low income, part-year workers, retirees on fixed income, students.

Source: IRS SOI In-State AGI Shares, tax year 2022. "Floor" = minimum AGI to enter that percentile group among all MA filers. Note: AGI does not include tax-exempt income (municipal bonds, Social Security for lower earners), so real income may be somewhat higher at lower percentiles.

How Have the Income Thresholds Changed Over Time? (2013–2022)

Minimum income needed to reach each percentile group. Rising floors mean you need to earn more each year just to stay in the same relative position.

Year	Top 1% floor	Top 5% floor	Top 10% floor	Top 25% floor	Top 50% floor (median)
2013	$579,524	$232,456	$162,639	$93,965	$47,611
2014	$632,541	$245,221	$169,921	$97,347	$49,179
2015	$649,796	$253,701	$175,492	$100,185	$50,670
2016	$655,689	$258,706	$178,580	$101,497	$51,641
2017	$698,256	$271,807	$186,479	$105,178	$53,560
2018	$739,998	$287,128	$195,224	$109,361	$55,740
2019	$765,791	$298,602	$201,983	$112,732	$57,700
2020	$777,052	$299,165	$201,228	$110,189	$56,192
2021	$988,253	$348,886	$226,688	$122,039	$62,005
2022	$891,118	$349,399	$232,957	$127,196	$65,279

Source: IRS SOI In-State AGI Shares, 2013–2022. The 2021 spike in the top-1% floor ($988K) reflects extraordinary capital gains that year — many high earners realized gains during the bull market, temporarily inflating the threshold.

Income Thresholds Over Time — All Percentile Floors (2013–2022)

Source: IRS SOI In-State AGI Shares. Each line shows the minimum income needed to be in that percentile group. All floors have risen — incomes at every level have grown in nominal terms.

MA Median Filer Income vs. Top 1% Floor (2013–2022)

Source: IRS SOI In-State AGI Shares. The median filer income (top-50% floor) has grown 37% since 2013. The top-1% floor has grown 54% — the gap between middle and top is widening.

📋 What This Actually Means — And What It Doesn't

The top 1% paying 38% of taxes isn't unique to Massachusetts — this pattern exists in most high-income states. What makes Massachusetts unusual is the combination: an unusually mobile top-1% (many work in finance, tech, and biotech — sectors with location flexibility), an unusually high new surtax that directly targets them, and an unusually volatile revenue base (76% of capital gains concentrated in 33,000 people whose investment portfolios swing with markets).

The bottom 50% aren't "doing nothing" — they contribute enormously through sales taxes, property taxes (via rent), payroll taxes, and as workers. But for state income tax specifically, the fiscal math is stark: lose 1,600 of those 32,800 top earners, and Massachusetts loses as much income tax revenue as gaining 200,000 average-income filers.