Estate Tax News – Exodus of wealthy residents called non-existent

CommonWealth Magazine reports on a report issued by the Massachusetts Budget and Policy Center, which suggests that “the business community narrative that millionaires are fleeing the state is unfounded.”

The Budget and Policy Center said Internal Revenue Service data from 2011 to 2020 indicate out-migration of high-income households is low in Massachusetts compared to other states.

“As a consequence, delivering large tax cuts to these few households to stem a non-existent exodus is misguided,” the center said in the brief.

The data the policy center relied on in its brief predates a big tax on high-income earners that was approved by voters in November — a 4 percentage-point income tax surcharge on earnings over $1 million.

The so-called millionaire tax has prompted concerns about the state’s competitiveness and spurred Gov. Maura Healey to put forward a $1 billion tax reform package that would provide relief to seniors, renters, and parents while paring back the reach of the estate tax and eliminate the higher tax on short-term capital gains.

Her proposal appears to have some traction in the Legislature, although some lawmakers have questioned the need to cut taxes that impact wealthier residents.

A copy of the brief can be found here.

This post is a part of Old Colony Law’s Estate Tax Updates.