FACT CHECK: Raise Up’s New Tax Proposal is a Let Down

The group Raise Up, primarily funded by the Massachusetts Teachers Association, is best known for one of its worst ideas – that is, the creation of an income surtax that imposes extra taxes on individuals earning over $1 million. Research from MOA and others shows the policy is driving away talent and taxable income, making Massachusetts less competitive.

Now, Raise Up is back with another misguided tax hike, this time taking aim at Massachusetts’ business community. The culprit? “Global intangible low-taxed income” or “GILTI,” which the group says should be taxed more to cover revenue shortfalls expected as a result of federal tax cuts.

But evidence warns that the fallout could be the final straw for many Massachusetts businesses, which are already finding it increasingly expensive and difficult to operate. Look no further than the companies shrinking their workforces and opting to invest outside of the Commonwealth.

We broke down Raise Up’s flawed case for expanding GILTI, unpacking how federal changes will actually impact Massachusetts, and what another steep tax hike on businesses could mean for our future.

MYTH: Massachusetts companies aren’t paying their “fair share.”

FACT: The Commonwealth’s businesses already pay one of the steepest tax burdens in the nation.

CNBC recently ranked Massachusetts as one of the worst states for high cost of doing business, thanks in large part to taxes.

Currently, all businesses pay an 8% tax rate on income earned in Massachusetts — one of the highest corporate income tax rates in the country. Then there’s the GILTI rule, which imposes that tax rate on 5% of certain foreign earnings for any business operating in the Commonwealth, putting us out of step with the U.S. rule (which allows a credit for taxes paid to other countries) and most U.S. states. (Key competitor states — including California, Michigan, Pennsylvania, Florida, and North Carolina – don’t impose any GILTI taxes on foreign income.)

Together, this complicated, costly tax burden is forcing companies big and small to reconsider whether it makes financial sense to operate in Massachusetts. Factor in other business expenses — including climbing energy and real estate costs, the rising cost of living for employees, and payments to the state’s broken unemployment insurance system — and you can see why some businesses might decide to leave.

Data shows this exodus is already underway. According to the Massachusetts Society of CPAs, a growing share of business clients are considering a relocation.

Instead of creating a more business-friendly economy, Raise Up wants to tax businesses even more — on income that wasn’t even earned here. The group is proposing a stunning ten-fold increase in the amount of income subject to GILTI, going from 5% to 50% of international income — a move that would make the Commonwealth even more of an outlier. Only a small minority of states use such a high GILTI threshold, many of which have significantly lower tax burdens than Massachusetts in other categories.

Raise Up’s proposal has nothing to do with “fairness.” Indeed, it’s a deeply unfair idea that undermines our ability to attract and retain companies.

MYTH: Federal tax changes are causing “devastating” budget cuts in Massachusetts.

FACT: Projected state revenue losses are modest at just one percent of the state budget.

Raise Up consistently positions its GILTI proposal as an antidote to an alleged statewide funding crisis. In an October press release, for example, the group claimed that expanding GILTI would plug federal funding gaps, which it attributes to the federal tax cut bill passed by Congress this summer.

This narrative is flat-out wrong. Massachusetts is one of the country’s least-reliant states on federal funding; in fact, this is a key reason the state rose on the 2025 list of CNBC’s Top States for Business.

Case in point: State Department of Revenue (DOR) Commissioner Geoffrey Snyder estimates that federal tax cuts will cost only 1% of the current state budget. While this will have some impact on state spending, this year’s budget already grew 5.5% over last year’s budget and by more than 50% since 2018.The state has enough revenue: This potential federal tax cut amounts to just 1.5% of revenues the state is estimated to collect this year. One percent of the budget will require policymakers to make adjustments, but hardly feels like a crisis. A state that has been substantially increasing spending year over year – outpacing both inflation and the wages of Massachusetts taxpayers – can efficiently allocate its ever-growing pot to fund key services.

MYTH: Raising GILTI taxes will raise $400 million in revenue.

FACT: The state estimates the proposal will raise less than a third of that.

Raise Up has exaggerated the size of the crisis. It’s also exaggerating the impact of its proposed solution. 

Raise Up posits raising taxes on businesses through the GILTI rule will fix funding cuts, claiming it would generate $400 million in revenue. In reality, the state Department of Revenue Commissioner reported the tax would actually generate less than a third of that – as low as $106 million.

This should not be surprising. Tax hikes often fall short of targeted revenue goals, as the intended targets take action to avoid the higher costs. In Massachusetts, this could mean even more businesses leaving the state for a less-costly climate. 

The GILTI Juice Isn’t Worth the Squeeze on Our Struggling Economy

Raise Up’s playbook is clear: Manufacture a crisis, and use it to justify immediate enactment of a harmful tax policy. We’ve seen this movie before, and the ending stinks.

Don’t just take our word for it: The leading experts on corporate taxation at the Council on State Taxation (COST) offer a dire warning for state policymakers, cautioning that Raise Up’s GILTI expansion would put American companies doing business in Massachusetts at a “competitive disadvantage” compared to foreign-based companies doing business here. COST also raises concerns about the constitutionality of Raise Up’s proposal, suggesting it might be a violation of foreign commerce laws. At a time when private sector job growth is lagging, unemployment remains high, and businesses are starting to flee, Massachusetts shouldn’t double down on Raise Up’s bad idea.