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Advocacy Alert: 2024 Public Policy and State Competitiveness Report Finds Policy Changes are Needed to Stem Outmigration

June 20, 2024

MassCPAs released its 2024 Public Policy and State Competitiveness Report, highlighting a concerning trend: high-income earners and businesses are leaving Massachusetts at an alarming rate. The report identifies the recently enacted millionaire’s tax as a key driver of this outmigration and calls for policy changes to make Massachusetts more competitive.

This report builds upon MassCPAs’ 2023 study that assessed the impact of the millionaire’s tax on high-income earners and businesses in the state. The 2024 findings are even more concerning and indicate that policymakers must act urgently to stem the flow of residents from the Commonwealth.
 


Key findings from the 2024 report include: 

  • Two-thirds of accounting professionals surveyed reported that at least one of their high-income clients relocated out of state in the last year. 
  • Many high-income residents are seriously considering a move, with 90% of respondents indicating their clients are considering leaving in the next year. 
  • The millionaire’s tax is a significant factor in relocation decisions, with 64% of respondents reporting it as one of the reasons their clients are moving. 
  • Businesses are also feeling the squeeze, with 22% of respondents indicating their business clients are considering leaving or shifting growth away from Massachusetts. 

“The results of our surveys echo what we hear often from our members, Massachusetts is losing residents and businesses,” said Zach Donah, president and CEO of MassCPAs. “ While we understand there are many factors that contribute to the Commonwealth’s overall competitiveness, this report is a reminder that tax policy is a major one.” 

Based on the results of the 2023 and 2024 surveys, MassCPAs recommends several policy changes, including:  

  • Decouple from the federal 163(j) business interest expense limitation. 
  • Raise the estate tax threshold to $5 million. 
  • Reform or eliminate the “sting tax” on S-corporations. 

“These changes would make Massachusetts a more attractive place to live, work and invest,” said Donah. “By creating a more competitive tax environment, the Commonwealth can ensure its long-term economic prosperity.”