The Tax Foundation released its 2025 State Tax Competitiveness Index today, and the results are a clear warning for Massachusetts. The Commonwealth ranks just 43rd in the nation, while neighboring New Hampshire jumped in rank to come in at #3. This growing gap between two bordering states competing for the same jobs and families is a serious threat to Massachusetts' long term economic health.

Massachusetts continues to impose a costly and complicated tax structure that places an overly heavy burden on employers, workers, and homeowners. Meanwhile, New Hampshire has positioned itself as one of the most competitive tax environments in the country, attracting new residents, entrepreneurs, and investment from across New England.

“The contrast is becoming impossible to ignore and Massachusetts cannot afford to continue to bury its head in the sand on this. Ranking so close to the very bottom should alarm every lawmaker and every taxpayer. Our high-cost tax system is driving out talent, capital, and opportunity, and New Hampshire's top tier ranking proves that better policy is possible right next door. We are falling behind not by chance, but by poor policy choices,” said Paul Diego Craney, Executive Director of the Massachusetts Fiscal Alliance.

Massachusetts earned some of the lowest marks in the country for its income tax structure, property tax system, and unemployment insurance taxes. Even New Hampshire, long considered one of the highest property tax states in the region, significantly outperformed the Commonwealth in the property tax rankings.  These weaknesses create significant barriers to growth, discourage investment, and make it harder for working families to stay here. While other states have modernized and simplified their tax policies to spur growth, Massachusetts continues to move in the opposite direction.

“This should be a turning point for state leaders. Our elected officials cannot continue insisting that higher taxes and heavier regulation carry no consequences. Families feel the strain. Small businesses feel the strain. The competitive advantage we once enjoyed has slipped away, and without urgent action, the losses will accelerate,” said Craney.

MassFiscal is urging Beacon Hill lawmakers to prioritize tax cuts, including the repeal of the income surtax, and the reversal of the harmful NetZero by 2050 climate mandate.

“New Hampshire is not beating us by accident. They are winning because they focus on competitiveness and growth. Massachusetts can do the same, but only if Governor Healey recognizes the challenge and commits to meaningful change with legislative leaders,” said Craney.