Proposition 80 Will Increase Out-Migration of High Earners and Businesses

Share on Facebook

Share on Twitter

Share on

LinkedIn

Passage of November 2018 ballot measure would jeopardize Massachusetts’ long-term economic health

BOSTON – Passage of Proposition 80, the tax hike proposal scheduled to appear on the November 2018 Massachusetts ballot, would accelerate migration out of Massachusetts, especially to Florida and New Hampshire, according to a new Pioneer study. Proposition 80 would add a 4 percent surtax on any annual taxable income over $1 million.

Download "Will The Wealthy Leave?"

In “Will The Wealthy Leave? They Already Are and Proposition 80 Will Only Make It Worse,” Pioneer Institute Research Director Greg Sullivan draws on IRS data showing aggregate migration flows by amount of adjusted gross income (AGI) and age of the primary taxpayer. The data show a strong correlation between state tax levels and migration patterns.

The report finds that Massachusetts already experienced a net outflow of $15.9 billion in AGI between 1992–93 and 2014–15. Unsurprisingly, the biggest beneficiaries were no-income-tax states like Florida, which captured 47 percent of it, and New Hampshire, which gained 27 percent.

Between 2011–12 and 2014–15, no-income-tax and no-capital gains tax Florida saw a net $39 billion AGI inflow. Fully 72 percent of that eye-opening number was attributable to taxpayers with AGI of $200,000 or more. Nearly 40 percent of the total growth in AGI among all Florida taxpayers from 1992–93 to 2014–15 was attributable to the state’s net increase in migration. By driving more residents and businesses to states with no income tax, Proposition 80 poses a serious threat to Massachusetts’ long-term economic health.

“Proposition 80 backers say the measure will not lead to an exodus of high earners,” said Pioneer Institute Executive Director Jim Stergios. “If the initiative passes, wealthy individuals will do what they are already doing — moving out — and they will do it at a much faster clip than is the case today. The result is Massachusetts will have higher taxes and a lot less money than proponents think. As the old saying goes, there is no such a thing as a free lunch.”

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Get Updates on Our Economic Opportunity Research

First Name Last Name
Email address

Related Posts

Massachusetts PPP Benefits Big Businesses, Data Called Into Question

August 14, 2020

Where Did the Largest PPP Loans Go? Assessing the distribution of loans by industry

0 Comments

August 13, 2020

The coronavirus has wreaked havoc on all parts of the economy,…

Non-Profits Facing COVID-19: Charles River's Esplanade Association on Why It's No Walk in the Park

0 Comments

August 11, 2020

Join host Joe Selvaggi as he talks with Esplanade Association’s executive director Michael Nichols about how he and other non-profits adapt to a surge in demand for services while coping with a collapse in fundraising opportunities.

Data, Attitudes, and Ecommerce: Noteworthy trends in retail for the present and future

0 Comments

August 3, 2020

Following the July 16th release of the June Retail Sales Report…

New Study Offers Guide to Recovery in MA Retail, Accommodation and Tourism, and Restaurant Sectors

July 28, 2020

A new guide to economic recovery in the retail and hospitality industries published by Pioneer Institute calls for the federal and state governments to consider consumption-based refundable tax credits for brick and mortar businesses; the federal government to conduct a detailed study of the costs and benefits of suspending employer-side payroll taxes; businesses to pay special attention to developing and marketing their cleanliness, hygiene and contactless procedures; and third-party customer review sites to include comments about the implementation of COVID safety measures to provide options and reassurance to safety-minded consumers

PPP Loan Tracker

0 Comments

July 7, 2020

To advance transparency regarding public funds, Pioneer Institute developed this Paycheck Protection Plan Loan Tracker. This web tool allows you to track PPP loans by recipient, lender, location, industry, and loan range. According to this data, from the Small Business Administration, 18,177 Massachusetts small businesses received PPP loans, which the companies claim retained 738,613 jobs.

Pioneer Institute Study Calls for Streamlining State Sales Tax Revenue Collection

June 10, 2020

At a time when state tax revenues are plummeting, a plan to modernize sales tax collection could get money into state coffers more quickly, according to a new policy brief published by Pioneer Institute.

Even for the most remote part of Massachusetts (Franklin County), it’s far from business as usual

0 Comments

June 2, 2020

The Connecticut River valley is home to some of the most productive…

Study: Safely Reopening Office Buildings Will Require Planning, Innovation

0 Comments

June 1, 2020

Safely bringing employees back into workplaces presents a significant challenge for employers located in office buildings, particularly when it comes to elevator operations and building entry and exit. To address the challenge, managers must develop plans to control the flow of workers, according to a new study published by Pioneer Institute.

38.8 percent of the Massachusetts workforce and 28.3 percent of the U.S. workforce have filed unemployment claims over the past ten weeks.

0 Comments

May 28, 2020

Data released today by the U.S. Department of Labor shows that 38.8 percent of the Massachusetts workforce and 28.3 percent of the U.S. workforce have filed unemployment claims since the COVID-19 unemployment surge began ten weeks ago.