Fiscal watchdogs are not buying a recent study that found Massachusetts has gained scores of millionaires and ultra-wealthy individuals since the millionaire’s tax went into effect.
The Massachusetts Fiscal Alliance and Mass Opportunity Alliance are shooting back after the Institute for Policy Studies, a national progressive think tank, reported that the 4% surtax on incomes over $1 million hasn’t caused millionaires to leave the state.
Instead, the millionaire’s tax has “expanded” the number of Bay Staters with a net worth of a million dollars or more since 2022, with their wealth seeing “tremendous growth,” the Institute for Policy Studies reported in a study published earlier this week.
The institute pointed to how Massachusetts saw a gain of at least 39% in millionaires between 2022 and last year, from 441,610 people to 612,109 people. The number of individuals with at least $50 million in total wealth also grew 35% in the same timeframe, from 1,954 people to 2,642 people, according to the study.
The national average in growth of residents reporting $1 million or more was 49% between 2018 and 2022, with Massachusetts trailing at 36%, according to a Tax Foundation report also published this week.
Paul Diego Craney, spokesman for MassFiscal, argued that the Institute for Policy Studies is trying to “spin the fact that incomes and net worth have increased across the country into a case for higher taxes.”
“But the reality is simple: incomes rose everywhere between 2018 and 2022 due to broader national trends like inflation, federal stimulus, and a booming stock market,” Craney said in a statement Thursday. “Net worths soared because housing prices soared. A surge in real estate values doesn’t mean Massachusetts tax policy is working.”
The Mass Opportunity Alliance also offered a sharp rebuke to the Institute for Policy Studies report. It pointed out how in January, U-Haul ranked Massachusetts as the state with the second-worst population growth for the second year in a row, while United Van Lines found that 53% of residents leaving the state earn $150,000 or more annually.
Massachusetts gained 69,603 residents between 2023 and 2024, but 90,217 international migrants helped offset a “loss” of 27,480 domestic residents, according to Census estimates.
“Clinging to false narratives only prolongs the bad policies that have raised costs, hiked taxes, and pushed families and businesses to the brink,” said Christopher Anderson, of the Mass Opportunity Alliance.
Money from the 4% surtax on incomes over $1 million has served as a boon to lawmakers over the past several years as the state experienced less-than-ideal revenue hauls and federal funding cuts.
Massachusetts expects to collect $2.4 billion in revenue from the surtax in fiscal year 2026, or slightly more than the $2.2 billion the voter-approved law brought in fiscal year 2024, according to Gov. Maura Healey’s administration.
Andrew Farnitano, spokesman for Raise Up Massachusetts, a millionaire’s tax advocacy group, slammed surtax opponents, whom he said argued the money “wouldn’t generate anywhere near the estimated $2 billion a year” in transportation and public education investments.
“They’ve been proven wrong on all counts,” Farnitano said in a statement. “Now, the same lobbyists for the ultra-rich are using cherry-picked anecdotes and data from 2022 — before the Fair Share Amendment took effect — to try to argue that multi-millionaires are fleeing the state in response to the new tax. The evidence proves them wrong.”
