Massachusetts Millionaire Tax Not Driving Wealthy Away, Study Finds
Report shows 35% increase in ultra-wealthy residents since tax implementation
A new report from progressive research groups indicates that Massachusetts has seen a significant increase in wealthy residents since implementing its millionaire tax in 2022. According to data analyzed by the Institute for Policy Studies and State Revenue Alliance, the number of individuals with at least $50 million in wealth grew by 35.2% from 1,954 in 2022 to 2,642 in 2024. Supporters of the surtax cite these findings as evidence countering claims that higher taxes would drive wealthy residents out of state.
The Massachusetts millionaire tax, which adds a 4% surtax on household income above $1 million to the existing 5% income tax rate, generated $2.46 billion in its first full year. These funds are being directed toward education and transportation investments by state lawmakers. While the report measures accumulated wealth rather than annual income, advocates maintain that a portion of these ultra-wealthy individuals are paying the income surtax, which affected approximately 27,000 taxpayers with annual incomes above $1 million in 2022.
KEY POINTS
- •Wealthy population up 35% since tax began
- •Tax generated $2.46B in first year
- •Middle-class still leaving due to costs
The study also found that the number of "millionaires by net worth" in Massachusetts increased by 38.6% between 2022 and 2024, from 441,610 to 612,109 individuals. Their collective wealth grew from $1.6 trillion to $2.2 trillion during this period. Researchers suggest that wealthy individuals typically have lower migration rates compared to the general public due to established family, business, and social connections in their communities.
The report comes amid broader discussions about tax policy affecting high-income earners, including recent comments by President Donald Trump on taxes for those earning more than $1 million annually. The researchers also modeled potential revenue from a hypothetical wealth tax on ultra-wealthy residents, though advocates clarified they are not currently pursuing such a policy. Instead, they remain focused on a "corporate fair share" initiative targeting global businesses.
Despite the growth in wealthy residents, Massachusetts continues to face challenges with outmigration due to high living costs. Critics note that while millionaires may not be leaving due to tax increases, middle-class and young workers are relocating because of housing prices, childcare costs, and overall affordability issues. This presents ongoing policy challenges for state lawmakers attempting to address these economic pressures while maintaining tax revenue.