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

As stay-at-home orders remain in place at the start of summer tourist season, COVID-19 takes a bite out of resort towns’ economies

0 Comments
/
Last month, Pioneer Institute showed that the hospitality and…

Survey Suggests Demand for Telecommuting After COVID-19 Crisis

Citing an avoidance of the commute and more flexible scheduling, nearly 63 percent of respondents to Pioneer Institute’s survey, “Will You Commute To Work When The COVID-19 Crisis Is Over?” expressed a preference to work from home one day a week, and a plurality preferred two to three days a week, even after a COVID-19 vaccine is available. Respondents cite social isolation as the biggest drawback of remote work. The survey was conducted from April 22nd to May 15th, and received responses from over 700 individuals.

Today’s Bureau of Labor Statistics estimate of a 15.1 percent unemployment rate in April only reflects half of Massachusetts’ COVID-19 unemployment surge

0 Comments
/
Today's release by the Bureau of Labor Statistics of a 15.1%…

32.9 percent of the Massachusetts workforce and 26.2 percent of the U.S. workforce have filed unemployment claims over the past nine weeks.

0 Comments
/
Data released today by the U.S. Department of the shows that 33.0 percent of the Massachusetts workforce and 26.2 percent of the U.S. workforce have filed unemployment claims since the COVID-19 unemployment surge began nine weeks ago.

Hubwonk Ep. 6: COVID-19 and Commerce: Main Street’s Concerns with Governor Baker’s Course

0 Comments
/
In this episode of Hubwonk, Host Joe Selvaggi & Pioneer Research Analyst Rebecca Paxton to get reactions to Massachusetts Governor Charlie Baker’s phased reopening, from the leaders of two statewide business organizations, NFIB and Retailers Association of Massachusetts.

Holyoke Soldiers’ Home Study Targets Inadequate Nursing Home Staffing Standards

Standards enforced at the federal and state levels are insufficient to address chronic staffing issues reported by staff and residents’ families at the Holyoke Soldiers’ Home, making that facility particularly vulnerable to the COVID-19 pandemic, according to new Pioneer Institute research.

Where in Massachusetts is being hit hardest by unemployment due to COVID-19?

Pioneer’s new tool, called “COVID Unemployment Tracker,” provides an interactive look at how economic shutdowns in response to the COVID-19 pandemic are affecting jobs and lives across the state of Massachusetts.

The past seven weeks of Massachusetts unemployment claims total 25.8 percent of the civilian workforce.

0 Comments
/
The U.S. Department of Labor released its weekly report on jobless claims Thursday morning at 8:30 a.m., reporting that Massachusetts received 55,448 initial unemployment insurance (UI) claims during the week ended May 2. This brings the total of regular UI claims filed in Massachusetts since March 14, the beginning of the unemployment surge, to 781,110. 

COVID-19 will likely lead to a recession. Can Massachusetts municipal budgets handle one?

0 Comments
/
Using municipalities' experiences during the Great Recession, a new policy brief examines the likely impact of COVID-19 on local property taxes, as well as political implications for state aid. We list the municipal revenues by category among the least tax-reliant communities in Massachusetts, show the trajectory of tax revenue growth rate in Massachusetts state and local governments, and rank stabilization fund assets per capita among Massachusetts Gateway Cities.

The past six weeks of Massachusetts unemployment claims total 24.0 percent of civilian workforce

0 Comments
/
The U.S. Department of Labor released its weekly report on jobless claims this morning at 8:30 a.m., reporting that Massachusetts received 70,714 initial unemployment insurance (UI) claims during the week ended April 25. This brings the total of unemployment claims filed in Massachusetts since March 14, the beginning of the unemployment surge, to 725,018. 

Report Finds “Reopening Day” in the Commonwealth Will Likely Include Phasing in Businesses and Contact Tracing

New study compares the reopening of three European countries – Austria, Denmark, and Germany – to highlight approaches that could inform the Commonwealth’s reopening strategy.

New jobless claims data shows that Massachusetts unemployment has grown from 2.8% to at least 20.4% in five weeks

0 Comments
/
Based on today’s jobless claims report, Pioneer Institute projects that the current unemployment rate in Massachusetts is at least 20.4 percent, with a minimum of 762,299 currently unemployed individuals.