Taxpayers Want Relief. This Proposal Can Give It to Them.

This week, an MOA-inspired proposal to revise Massachusetts’ existing limit on state tax revenue growth officially qualified for the November ballot. It would create more frequent refunds of excess tax dollars collected by the state.

Massachusetts taxpayers desperately want relief. Data shows this proposal could have a meaningful impact on households’ income.

Massachusetts high taxes are making the Commonwealth less competitive.

New MOA polling shows a majority of respondents (60%) believe Massachusetts’ steep tax burden makes the state less attractive for people to live and work here.

It isn’t hard to see why. MOA analysis of Census Bureau data shows Massachusetts has one of the highest total tax burdens in the nation. The main culprit? Income taxes. Census Bureau data shows Massachusetts had the highest income tax burden in the nation, clocking in at $3,422 per capita.

Massachusetts voters want tax relief.

MOA asked voters if they want state lawmakers to do something to provide relief from high taxes this year. Seventy-one percent said yes.

There was a straightforward proposal that would have reduced the state personal income tax rate from 5 to 4%, which would have locked in thousands in savings for Massachusetts families for years to come. However, this measure was blocked by the state Supreme Judicial Court, claiming a technical error made by the state Attorney General in the drafting process.

But there are other effective ways to increase accountability for taxpayers and control our state’s spending in the long run.

Revising the state’s limit on how much revenue Massachusetts can collect would trigger more frequent tax refunds to taxpayers.

Under a law called Chapter 62F, Massachusetts currently has a limit on how much tax revenue the state can collect annually. Every year, the Department of Revenue (DOR) calculates how much Mass. taxpayers’ wages and salaries have grown, and applies that same growth rate to state tax revenues for the year. The resulting amount dictates the highest amount of revenue the state is allowed to collect that year; anything greater than this calculation gets returned to taxpayers.

Right now, the limit increases based on wage and salary growth above the previous year’s limit, which may already be higher than what was actually collected that year. Last year’s limit was also based on the previous year’s limit, and so on. It’s been this way since 1987, so the annual “allowable” limit has compounded over time to be artificially much higher than actual tax revenues. That means under the existing limit, taxpayer refunds have only been triggered twice in the law’s four-decade history.

There’s another problem with the current revenue limit that its drafters couldn’t have foreseen. Recent legislative changes have excluded some tax revenue from this limit and this proposal would correct that.

Had these revisions been in place all along, taxpayers would have seen significantly more frequent refunds of their tax dollars. In just 2025 alone, each taxpayer could have received $250 back in their pockets. Since the law went into place in 1987, Massachusetts taxpayers could have received 26 refunds.

Conclusion

Massachusetts residents are saying the state is losing its competitive edge because of high taxes. The steep tax burden is a primary factor pushing people to move elsewhere, according to a survey of former residents.

Residents need tax relief now. Our research shows that this proposal could make sure the state collects taxes responsibly, and returns excess tax dollars back to residents. It could be an effective way to hold the state accountable to taxpayers, particularly if combined with legislative action to provide more permanent tax relief.