Massachusetts home to more millionaires despite new surtax, report says

Yahoo

28-04-2025

Surtax supporters released data Monday that they said pokes holes in the argument that the state's new tax on high earners is causing higher-income residents to move out of Massachusetts.
The report from a pair of progressive research groups found that the number of individuals in Massachusetts with at least $50 million in total wealth grew from 1,954 in 2022 -- the year voters adopted the 4% surtax on household income above $1 million -- to 2,642 in 2024, a 35.2% increase.
The Institute for Policy Studies and State Revenue Alliance report analyzed data from Wealth-X, a proprietary database of millions of records on the world's wealthiest individuals, according to Raise Up Massachusetts.
The new income surtax, which adds to the existing 5% income tax rate, generated $2.46 billion in its first full year, and Beacon Hill Democrats are spending that money on investments in education and transportation.
The report measures accumulated wealth rather than annual income, but surtax supporters say they're certain that some share of the 'ultra-wealthy' captured in the report are paying the income surtax.
'This is further evidence that multi-millionaires are not fleeing the state in response to the new tax – they are staying here, paying more in taxes, and enjoying the stronger transportation and public education systems that Fair Share dollars are funding,' said Shanique Rodriguez, executive director of the Massachusetts Voter Table and a member of the Raise Up Massachusetts Steering Committee.
There's bipartisan agreement in Massachusetts that high costs of living here, including housing and energy prices, are causing some residents to pick up and move to lower-cost states. While addressing the underlying causes of that outmigration and the state's 'affordability crisis' has become an ongoing public policy challenge, the report looks exclusively at the number of higher-wealth households to draw conclusions about tax impacts.
Raise Up says the 2,642 ultra-wealthy individuals delineated in the report represent 0.04% of the Massachusetts population, and collectively hold $500.4 billion in total wealth.
The report also modeled a hypothetical 'wealth tax' on this group with at least $50 million in total wealth. The researchers concluded that Massachusetts has the potential to raise $3.7 billion with a 1% tax, $7.4 billion with a 2% tax and $11 billion with a 3% tax.
Raise Up spokesman Andrew Farnitano said the group is not pursing a wealth tax 'at the moment' and instead remains focused on its push for the Legislature to approve a new 'corporate fair share' policy targeting global businesses that advocates say evade millions of dollars in state taxes.
The number of Massachusetts taxpayers with annual income above $1 million was about 27,000 in 2022, the last year when data is available from the IRS, according to Raise Up.
The report found that the number of 'millionaires by net worth' in Massachusetts, a category that includes the value of homes, retirement and other assets, rose by 38.6% between 2022 and 2024, from 441,610 individuals to 612,109. Their collective wealth increased from $1.6 trillion to $2.2 trillion, or 37.3%.
'Research has demonstrated that million-dollar earners and high net worth individuals tend to exhibit lower rates of migration compared to the general public,' said lead report author Omar Ocampo, researcher at the Institute for Policy Studies. 'This is not a surprise. Their family, business and social network deeply root them to amenity rich locales where they enjoy a high quality of life. A modest increase on their incomes does not compel the overwhelming majority of millionaires to flee to other states.'
President Donald Trump stirred debate over tax policy recently when he weighed in on higher taxes on those earning more than $1 million per year, including impacts on other taxpayers and election outcomes.
In a recent Boston Globe 'inbox' item, Jonathan Cohn, policy director of Progressive Mass, said surtax-funded investments in education and transportation will spark housing production and that policies like free school meals, bus rides and community college 'are making the state more affordable for middle-class families.'
'Massachusetts is experiencing outmigration, but it's not multimillionaires who are fleeing slightly higher taxes. It's young workers fleeing our high cost of living,' Cohn wrote. 'As a millennial, I've become accustomed to seeing friends move out of Boston, then out of the state entirely, due to high cost of living. If you want to buy a home for a decent price or find affordable child care, good luck. We are losing people because affording the high quality of life we tout is getting father and farther out of reach.'
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