Survey of Business Sentiment: MA Income Tax Hike Would Lead to Employer Exodus

Share on Facebook
Share on Twitter
Share on

Majority of respondents pay taxes on the biggest portion of their income via individual returns, would be subject to the tax hike

BOSTON – Nearly three quarters (73 percent) of Massachusetts business leaders think business associates will leave the state if a constitutional amendment appearing on the November ballot to hike taxes is successful, according to a survey conducted by Pioneer Institute.

Pioneer was invited to survey members of the Retailers Association of Massachusetts and the state chapter of the National Federation of Independent Businesses.  Local chambers of commerce also participated in the survey, and a total of 133 individuals responded.

“The survey suggests that business owners and executives are beginning to realize the negative impacts on the economy and tax base of the tax hike amendment,” said Pioneer Executive Director Jim Stergios.

“Small business owners are nearing a breaking point following pandemic-related shutdowns and restrictions, labor shortages, supply chain disruptions, and now record high inflation,” added Christopher Carlozzi, state director of the National Federation of Independent Business.  “Instead of increasing taxes for job creators, Massachusetts must create an atmosphere that encourages economic growth and expansion.”

Of the respondents:

  • 57 percent report the largest portion of their income on individual returns and would be subject to the surtax.  Mostly small “pass-through” businesses such as S corporations, partnerships and limited liability corporations pay taxes via individual returns.
  • 72 percent of respondents said they plan to retire in the next decade and 56 percent said they plan to sell their businesses within that period.  Of those planning to sell, 58 percent said they expect the gain from the business sale would exceed $1 million, making them subject to the surtax.
  • A smaller portion (22 percent) said they expect to sell their current home to help fund retirement.  Of those, 56 percent will have lived in the home for at least 30 years before retirement.
  • A three-to-one margin (76 percent) believes that Massachusetts is “on the wrong track,” and 62 percent oppose the tax-hike amendment.

“I was surprised by both how many of our members are “pass-through” entities and how many are looking to sell or retire within the decade,” said Retailers Association of Massachusetts President Jon Hurst. “Those numbers should be a wake-up call that our Main Streets are in danger in coming years, and that our public policy leaders need to make sure the Commonwealth has tax and employment laws that will foster a whole new generation of entrepreneurs and risk takers.”

About Pioneer

Pioneer Institute develops and communicates dynamic ideas that advance prosperity and a vibrant civic life in Massachu­setts and beyond. Success for Pioneer is when the citizens of our state and nation prosper and our society thrives because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and when our government is limited, accountable and transparent. Pioneer believes that America is at its best when our citizenry is well-educated, committed to liberty, personal responsibili­ty, and free enterprise, and both willing and able to test their beliefs based on facts and the free exchange of ideas.

Get Updates on Our Economic Opportunity Research

Related Posts:

Pioneer Institute Statement on Question 1

Yesterday, voters came closer than many expected to rejecting the largest tax increase in Massachusetts history, even though opponents were dramatically outspent by the unions that bankrolled the amendment to the state Constitution. 

Pioneer Institute Expects That Massachusetts Taxpayers Will Be Refunded $3.2B Due To State Revenue Cap

Pioneer Institute projects that the state will refund approximately $3.2 billion to taxpayers due to a state law sponsored by Citizens for Limited Taxation and voted on by taxpayers in 1986 that caps the amount of revenue the state can collect in any given year.

Survey of Business Sentiment: MA Income Tax Hike Would Lead to Employer Exodus

Nearly three quarters (73 percent) of Massachusetts business leaders think business associates will leave the state if a constitutional amendment appearing on the November ballot to hike taxes is successful, according to a survey conducted by Pioneer Institute.

As States Compete for Talent and Families, Massachusetts Experienced a Six-Fold Increase in Lost Wealth Compared to a Decade Earlier

With competition for businesses and talent heating up across the country, in 2020 Massachusetts shed taxpayers and wealth at a clip six times faster than even just a decade ago. Between 2010 to 2020, Massachusetts’ net loss of adjusted gross Income (AGI) to other states due to migration grew from $422 million to $2.6 billion, according to recently released IRS data now available on Pioneer Institute’s Massachusetts IRS Data Discovery website. Over 71 percent of the loss was to Florida and New Hampshire, both no income tax states.

Book Reveals How Tax Hike Amendment Would Damage Commonwealth’s Economic Competitiveness

If adopted, a constitutional amendment to hike state taxes that will appear on the ballot in November could erase the hard-earned progress Massachusetts has achieved toward economic competitiveness over the last 25 years and may not result in any additional education and transportation funding, according to a new book from Pioneer Institute, entitled Back to Taxachusetts?: How the proposed tax amendment would upend one of the nation’s best economies, which is a distillation of two dozen academic studies.

Study: Legislature Likely to Reduce Spending on Education and Transportation from Other Revenue Sources, Replace Cuts with Surtax Money

Revenue from a ballot initiative to amend the state Constitution and raise income taxes on households and businesses by adopting a graduated income tax structure would supposedly provide resources for transportation and public education, but a new study published by Pioneer Institute finds that, were the tax amendment to pass, the money would be fungible and much of it likely spent on general budget measures.   

Pioneer Supports Legal Challenge to Misleading Tax Ballot Language, Releases Video

Pioneer Institute supports the diverse and bipartisan group that filed a complaint with the Massachusetts Supreme Judicial Court (SJC) challenging the summary language meant to provide an accurate description of the tax hike amendment to voters. The language was approved by the Attorney General and Secretary of the Commonwealth when a similar amendment was proposed in 2018, and unless the lawsuit is successful, will likely appear on the Massachusetts ballot in November.

Study: Tax Up For A Vote In November Would Ensnare Over Three Times More Taxpayers Than Previously Estimated

Analyses from the Massachusetts Department of Revenue (MADOR, 2016) and Tufts University’s Center for State Policy Analysis (2022) dramatically underestimated the number of households and businesses impacted by the constitutionally-imposed tax hike that the legislature is putting before voters in November 2022, according to a new study from Pioneer Institute.