BOSTON BUSINESS JOURNAL: Mass. doesn’t need a tax hike. It needs a reality check.

This piece originally appeared in The Boston Business Journal on December 4, 2025.

By Christopher R. Anderson, Jim Stergios and Jay Ash – Mass Opportunity Alliance

Today, Massachusetts’ business confidence has dropped to its lowest point since the depths of the pandemic. That’s troubling — but hardly surprising. The cost of living and operating in the commonwealth continues to climb, and more employers are voting with their feet, relocating to states where the economic climate is more predictable and more affordable.

Massachusetts is still a global innovation leader — with world-class universities, life sciences, tech, healthcare and a deep talent pool. But rising costs, tax policy, outmigration and a weakening business climate threaten to erode those strengths and revive the “Taxachusetts” narrative. A proposal that would increase corporate taxes on many Massachusetts employers is the latest misstep.

The push comes from Raise Up Massachusetts, the union-backed coalition behind a 2022 tax policy that has already contributed to outmigration. The group now argues that businesses are not paying “their fair share” and is urging lawmakers to expand the state tax on so-called Global Intangible Low-Taxed Income, or GILTI. Under the proposal, Massachusetts could tax a larger share of a company’s foreign earnings — even if the products were not made here and taxes were already paid abroad.

Successful companies make tempting targets. But policymakers should separate rhetoric from reality, because the consequences of pushing employers out of state are real.

Start with the “fair share” claim. It doesn’t hold up. A 2024 Ernst & Young analysis examined business tax burdens in all 50 states and found that Massachusetts businesses already pay up to 2.7 times more in taxes than the benefits they receive from the state.

In other words, employers are more than pulling their weight.

That should surprise no one. Massachusetts already has one of the steepest business-tax burdens in the nation, and CNBC recently ranked us among the worst states for the cost of doing business — largely due to taxes. Instead of easing these pressures, the GILTI plan doubles down on them, making Massachusetts less competitive against states like California, Florida and North Carolina, none of which impose a GILTI tax.

The impacts would be especially devastating for the companies that define the Bay State’s knowledge economy — including bioscience, software, medical devices, AI, advanced manufacturing, and more — that depend on foreign research partners, distributors, and customers. At a time when Massachusetts is already losing professional, scientific and technical services jobs faster than competitor states, expanding GILTI would further erode our ability to retain high-wage innovation jobs. Add in federal research funding cuts, and the combination could deal a fatal blow to one of the bedrocks of our state economy.

And for what? Even the state’s Department of Revenue says the payoff will be meager. Raise Up Massachusetts claims the tax could raise $400 million. But the commonwealth’s revenue commissioner has made clear the real number would be only a fraction of that.

Worse, expanding GILTI could put the state on shaky legal footing. The Council on State Taxation warns that the proposal may violate the U.S. Constitution’s foreign commerce clause — meaning taxpayers could pay twice: once through a poorly designed tax, and again to defend it in court.

Fortunately, voters aren’t on board with higher taxes. A recent survey by the Mass Opportunity Alliance found that only 7% of respondents think raising taxes should be the first step in addressing a budget gap. More than two-thirds believe the state should control spending instead. Across parties and regions, Massachusetts residents overwhelmingly want better stewardship of existing revenue, not another tax hike.

Voters may soon get a say. Two measures inspired by the alliance — one to cut taxes and another to strengthen state spending discipline — are expected to appear on the 2026 ballot.

Lawmakers should take note. To restore Massachusetts’ competitive edge, the commonwealth must lower tax burdens, practice fiscal responsibility and take on the high costs that make living and doing business here so difficult.

A healthier business climate would mean more jobs, more tax revenue, more opportunity and a stronger, more resilient economy.