The Massachusetts Fiscal Alliance issued the following statement today following news that Massachusetts had officially plummeted to the 5^th worst state in the nation in the Tax Foundation’s latest business tax climate index.

Meanwhile, Florida is the 4^th best and New Hampshire is the 6^th best. To view the rankings, please click here.

“We’ve long warned that this would be the case with the passage of the income surtax amendment, but as the Tax Foundation points out, there are other factors that have been pushed by the legislature that are exacerbating the situation. The so-called “tax reform” package actually seems to have made the situation worse, rather than better,” noted Paul D. Craney, a spokesman for the Massachusetts Fiscal Alliance.

According to the Tax Foundation’s website, Massachusetts fell further than any other state in the overall rankings this year, sliding down 12 spots. Most strikingly, in the rankings on the individual tax component, Massachusetts was in free fall, declining 33 spots from being the 11^th best state in the country to the 6^th worst state.

“The few good things that made it through in the legislature’s recent tax reform package didn’t even make a dent in our rankings, but the Tax Foundation specifically cites the imposition of a new marriage penalty as one of the reasons for such a precipitous decline. Proponents of the income surtax made a big deal during their campaign that the income surtax would only apply to individuals making over $1,000,000 a year. With a flip of a switch, the legislature lowered that threshold to $500,000 for married people and the Tax Foundation is predicting a clear negative outcome from this,” noted Craney.

In addition to the legislature’s imposition of a marriage penalty, the Tax Foundation also cited the implementation of a new payroll tax they had previously passed, which went into effect this year.

“Across the board, we’re seeing bad policy decisions from Beacon Hill exacerbating an already dangerous situation. They paid lip service to competitiveness this year, but when the final product was delivered it did more harm than good. It’s an absolute forced error on the part of the legislature and one which we’ll all be paying for in the coming months as people and wealth continue their outward flow from the Commonwealth,” noted Craney.

Other data points worth noting in the Tax Foundation ranking is that Massachusetts has the highest taxes of any other state for its unemployment insurance tax rate.