More millionaires in Massachusetts despite new surtax
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Massachusetts has seen a 38.6% jump in the number of millionaire residents since voters approved a 4% surtax on high earners in 2022.
Why it matters: The uptick in super-wealthy Bay Staters contradicts predictions that rich residents would flee the state for lower-tax areas, like over the state line in income-tax-free New Hampshire.
By the numbers: The number of individuals with a net worth over $1 million grew from 441,610 in 2022 to 612,109 in 2024, according to a report from the Institute for Policy Studies and the State Revenue Alliance.
- The collective wealth increase: from $1.6 trillion to $2.2 trillion, or 37.3%.
- The number of residents with at least $50 million grew 35.2%, from 1,954 to 2,642.
Catch up quick: Massachusetts voters approved a 4% surtax on income earned over $1 million in 2022.
- The surtax generated $2.46 billion for state transportation and education programs in its first full year.
The intrigue: The data directly challenges the primary argument used by opponents during the 2022 ballot campaign, who warned higher taxes would cause an exodus of rich residents and even ultimately lower the state's income tax revenue.
What they're saying: The rich don't move around as much as average citizens, per the report.
- "Their family, business and social network deeply root them to amenity rich locales where they enjoy a high quality of life," said report author Omar Ocampo.
The other side: With a national economic downturn looking more likely in 2025 or 2026, opponents of the surtax maintain that taxing the very wealthy is harming the local economy.
- The Mass Opportunity Alliance challenged the report, claiming the IPS's findings contradict IRS data that shows the number of residents earning over $1 million had declined sharply — not risen — since 2022 when the income surtax was enacted.
- They also point to the state's net out-migration that year.
- They say the report relies too much on data from the consulting firm Wealth-X that measures net worth rather than taxable income.
- "There is absolutely zero debate that the income surtax is having a negative impact on the state economy," Massachusetts Fiscal Alliance executive director Paul Diego Craney told the Boston Herald.
The bottom line: The surtax is raising more revenue than even proponents expected, while the millionaire population continues to grow, suggesting tax policy may not be as important to millionaires as opponents expected.
Editor's note: This story was updated to include the Mass Opportunity Alliance's response to the report.