Editorial Staff

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

/in , , , , /by Editorial Staff
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

Related Posts

Pioneer Report Highlights Pre-Pandemic Employment Growth in Massachusetts’ Hospitality & Food Industry

In the lead-up to the COVID-19 crisis, the Massachusetts Hospitality and Food Industry enjoyed generally positive employment growth, according to a new report from Pioneer Institute that draws data from the MassEconomix web tool. Most of the Hospitality and Food Industry employment across the state is concentrated in full-service restaurants and hotels.

Pioneer Report Highlights Employment Growth in Lowell, Massachusetts

In 2018, employment in Lowell, Massachusetts finally surpassed its pre-Great Recession peak, according to a new report from Pioneer Institute that draws data from the MassEconomix web tool. Before COVID-19, job growth in the city was driven largely by a resurgence in manufacturing and a continued high concentration of healthcare firms.

Ballot Question 1: Risks & Regulations Regarding Right to Repair

0 Comments
/
Join host Joe Selvaggi and security technologist Prof. Bruce Schneier as they discuss risks associated with car telematics as well as how best to ensure public safety in the future of the internet of everything.

Small Business Life Support: Policy Relief for Firms Sickened by COVID?

0 Comments
/
Host Joe Selvaggi talks with Pioneer Institute’s Andrew Mikula and Retailers Association of Massachusetts' Jon Hurst about the state of small business in Massachusetts six months into the pandemic.

Pioneer Report Underscores Wide Disparities in Economic Performance between Industry Sectors in Massachusetts

Service-based industries have significantly outperformed manufacturing and other traditional blue-collar economic sectors in Massachusetts since 2008, according to a new report from Pioneer Institute that draws on data from the MassEconomix web tool. In “Broad Industry Sector Trends in Massachusetts, 1998-2018,” two decades of data show fluctuating employment changes across the state, as well as changes in firm size and the types of firms disproportionately headquartered in the Commonwealth.

Study: Economic Recovery from COVID Will Require Short-Term Relief, Long-Term Reforms

As the initial economic recovery from the COVID-19 pandemic has slowed, a new study from Pioneer Institute finds that governments must continue to provide short-term relief to stabilize small businesses as they simultaneously consider longer-term reforms to hasten and bolster recovery – all while facing a need to shore up public sector revenues.

Massachusetts PPP Benefits Big Businesses, Data Called Into Question

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

0 Comments
/
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.

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

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

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.