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Massachusetts has been nicknamed “Taxachusetts” since the 1970s due to the perception of high state taxes, particularly during that era. The term became popular in response to a combination of high income, property, and sales taxes, which many residents and critics felt were excessive compared to other states. The nickname reflected frustrations over the state’s tax policies and was often used in political rhetoric to argue for tax reforms and reductions.
Although Massachusetts has implemented tax reforms since then, the nickname has historically referenced the state’s once-high tax burden. Entrepreneur Kevin O’Leary recently mentioned it in an interview on Fox News, saying, “I left Massachusetts, and I moved to Florida, and most of my neighbors where I live are from my hometown Boston. We cannot afford to live there anymore.”
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It isn’t just O’Leary bandying about the Taxachusetts name. Bill Belichick, who coached the New England Patriots to six Super Bowl victories, recently called the state Taxachusetts as he weighed in on the impact of a tax rule that he says may keep the state from attracting top sports talent.
For 2023, the state introduced what has been called the millionaire tax, a 4% surtax on taxable income over $1,000,000. The tax threshold will rise every year, keeping pace with inflation. The tax generated $2.2 billion in fiscal 2024 for the state, pulling in revenue from CEOs, professional athletes, and other high-net-worth individuals. In addition to this tax, the state also has the fifth-highest property tax in the country.
On the Pat McAfee show, Belichick said the tax might hamper the ability of local teams to attract top players because nearly every player, even those on the practice squad, might come close to having to pay the tax. “It’s just another thing you’ve got to contend with in negotiations up there,” he said. “It’s not like Tennessee or Florida or Nevada, or some of these teams have no state income tax. So you get hit pretty hard on that with the agents. They’ll come and sledgehammer you down about the taxes they’re paying.”
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Belichick isn’t the only sport-related figure chiming in on the impact of the tax. Steve Pagliuca, formerly of Bain Capital and a co-owner of the Boston Celtics, left Massachusetts for Florida last year, selling his home for $8.8 million. Pagliuca has said that the tax wasn’t a factor in his move. He left because he retired from Bain Capital and was already mostly living in West Palm Beach. Pagliuca told the Boston Business Journal that taxes play a role in recruiting, saying that “punitive tax measures” can make it more attractive for high earners to head to lower-tax states.
In a story on the tax for NPR, Evan Horowitz of the Center for State Policy Analysis at Tufts University said that people in the million-plus tax bracket will likely change their behavior, whether leaving the state or getting more creative about hiding their money. It may take a few years to see if the tax does chase high earners out of the state. A study from Boston University’s Questrom School of Business estimated that the state could lose $1 billion in tax revenue by 2030 if current migration trends continue. For some high earners, it seems, including former Patriots star Tom Brady, Florida is the place to be.
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This article Is Bill Belichick Right About What Is Happening In ‘Taxachusetts’? originally appeared on Benzinga.com
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