BUSINESS AND MONEY
Net loss accelerated in recent years; main reasons include high taxes, housing and healthcare
A Pioneer Institute study released on Tuesday shows that Massachusetts lost $10.6 billion in adjusted gross income (AGI) to net out-migration between 2020 and 2022, more in those three years alone than the $10 billion it lost from 2012 to 2019.
In all, the Commonwealth experienced a four-fold increase in AGI loss from 2012 to 2022, according to a new study published by Pioneer Institute.
The net loss of taxpayers followed a similar pattern, rising from just over 6,000 in 2012 to more than 26,000 in 2022.
“It’s imperative that states losing residents and employers assess what’s going wrong and seek to right the ship,” said Aidan Enright, Economic Research Associate at Pioneer Institute and author of “Mass Out-Migration: Outflow of Wealth and Residents Continues.”
Massachusetts rose from ninth among the states in net out-migration of AGI in 2019 to fifth in 2022.
The study finds that an important reason for the outflow of people and wealth is that Massachusetts is one of the most expensive places in the country to live, with an acute housing shortage, high tax rates and expensive healthcare.
While 21 states reduced income taxes in 2021 and 2022, Massachusetts voters adopted a 4 percent surtax on annual incomes over $1 million.
In 2023, Massachusetts adopted a modest tax reform package that reduced the short-term capital gains tax rate and increased the threshold for the state’s estate tax. Neighboring states Connecticut and Vermont significantly raised their estate tax thresholds, while Massachusetts still has the third lowest threshold in the country at $2 million. The federal tax only applies to estates worth more than $12.9 million.
“There’s no fixing the outflow of talent and capital without decisive action from…
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Sixteen percent of California households could afford to purchase the $880,250 median-priced home in the third quarter of 2024, up from 14 percent in second-quarter 2024 and up from 15 percent in third-quarter 2023
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