New Data from the Bureau of Economic Analysis Shows Personal Income Levels Dropped As Millionaire’s Tax Was Enacted
New data from the Bureau of Economic Analysis (BEA) released at the end of June shows Massachusetts and Indiana were the only two states in the entire country to see personal incomes drop during the first quarter of 2023. During that time, the U.S. percentage change increased by 5.1%. In New England, Maine toped the nation at 11.4%, New Hampshire ranked 29th best at 6.1%, Vermont at 30th best at 6%, Rhode Island at 33rd best at 5.8%, Connecticut at 36th best at 5.5%, and Massachusetts at 49th best at -0.9%. For comparison’s sake, Florida was 10th best at 7.9%. To read more about BEA’s data, please click here.
According to BEA, “Transfer receipts increased in 45 states and the District of Columbia, while growing 6.1 percent nationally. The growth in transfer receipts reflected an 8.7 percent increase in the cost-of-living adjustment for social security benefits. The percent change in transfer receipts ranged from 38.5 percent in Maine to –31.1 percent in Massachusetts (table 4). Transfer receipts was the leading contributor to growth in personal income in Maine, the state with the largest increase in personal income in the first quarter. It was also the leading contributor to the decrease in personal income in Indiana and Massachusetts. Transfer receipts in all three states were impacted by one-time state refundable tax credits.”
During the last two quarters of 2022 and the first quarter of 2023, there were 18 states which enacted some form of a taxpayer refund. Massachusetts was among them due to the 1986 voter approved law known as 62F which was triggered during the 4th quarter of 2022. During the 4th quarter of last year, 62F was responsible a 12% increase in the share of “personal current transfer receipts from refundable tax credits,” the highest percentage in the nation during that quarter. This information may be found by clicking here.
“This new data is stark for Massachusetts taxpayers and should be a very clear warning to State House lawmakers. While the nation benefited from rising incomes, and 48 other states experienced income growth, Massachusetts was nearly alone in its decline. At the same time, the income surtax amendment was enacted and began to have a clear impact on the state economy and our uncompetitiveness. In the New England region, every state saw income growth with Maine the highest in the country and New Hampshire the second highest in New England,” said Paul D. Craney, a spokesman for the Massachusetts Fiscal Alliance.
“BEA data also shows that the voter approved tax cap and rebate law known as 62F had an economic benefit to Massachusetts taxpayers during the last quarter of 2022. During that time period, it was the most beneficial tax rebate program in the country and it was the only form of tax relief for Massachusetts taxpayers because Speaker Ron Mariano and Senate President Karen Spilka refused to pass any legislative tax relief last year and they continue to do the same this year. Speaker Mariano is even going as far as trying to change 62F so it becomes less effective and nearly impossible to be enacted,” continued Craney.
“This data can only be interpreted one way; Massachusetts is in trouble. Governor Maura Healey, Speaker Ron Mariano, and Senate President Karen Spilka need to wake up to these warnings that continue to focus in on Massachusetts high taxes and uncompetitivess,” finished Craney.
Massachusetts Fiscal Alliance strongly urges Governor Maura Healey and lawmakers to pass tax cuts, not water down or change 62F, and reject any attempts to enact a marriage penalty which would apply the millionaire’s tax to non-millionaires.