Massachusetts lost $4.2b in income after millionaire tax kicked in

The numbers are uncomfortable, and both sides know it. In 2023, the first full year Massachusetts enforced its new 4% surcharge on incomes above $1 million, residents who left the state took $4.2 billion in net adjusted gross income with them — one of the highest outflow figures in the country, and an 8% jump from the prior year. Fresh IRS data dropped this week, and it hands ammunition to everyone at the table.

What the irs data actually shows — and what it doesn't

Here's the thing that gets buried in the partisan noise: the raw number of high-earners leaving Massachusetts actually fell year over year. Filers reporting $200,000 or more — the IRS's top bracket for migration tracking — showed a net decline in departures compared to 2022. That's the detail the Massachusetts Budget and Policy Center was quick to flag, calling it conclusive proof that very high-income residents are still contributing at a growing rate based on their continued Massachusetts residency.

But Jim Stergios, executive director of the Boston-based Pioneer Institute, isn't buying the optimism.