Massachusetts is losing more residents and money to states like Florida and New Hampshire after a new 4 percent tax on incomes over $1 million went into effect. IRS data for 2023 show the state’s total lost income more than doubled compared with earlier years, ranking Massachusetts fourth in the country for people moving out with their money.
Since 2012, the state has lost $4.18 billion in income to other states, up from $900 million. Florida and New Hampshire alone took $2.75 billion, making up about two-thirds of the total lost income.
Young adults are leaving in big numbers. In 2023, about 7,500 people aged 26 to 35 moved out, more than five times the number a decade ago. Older residents nearing retirement are also heading for lower-tax states, taking $1.3 billion in income with them.
Jim Stergios of the Pioneer Institute said, “We are losing key working-age and pre-retirement groups. That combination is a real risk for the state’s workforce, tax base, and long-term economic health.”
International immigration had helped offset people leaving, but recent data show arrivals dropping sharply, making the outflow more worrisome. High-income earners leaving in 2023 accounted for 70 percent of the state’s lost income.
In all, Massachusetts lost nearly 30,000 people and more than 16,000 taxpayers in 2023, raising concerns about the state’s future economy and tax revenue.
