The warning was simple enough to fit on a bumper sticker: tax millionaires and they will leave.
Massachusetts tested the claim.
In 2022, voters approved what became known as the “millionaire’s tax,” a 4 percent surtax on annual income above $1 million. The money was dedicated to education and transportation. The argument for it was direct: the people with the greatest ability to pay should contribute more to the public systems that make the state work. The argument against it was just as direct: high earners are mobile, and Massachusetts would drive them to Florida, New Hampshire, or any other state where the tax bill looked friendlier.
More than three years later, the first part of the experiment has an answer. The tax raised money. A lot of it.
The second part is murkier. People are leaving Massachusetts. Income is leaving with them. But the available evidence does not yet show that the surtax caused the kind of millionaire exodus its opponents predicted.
That distinction matters, because the Massachusetts experience is now more than a state tax story. It is a small test case for a national question: what happens when government tries to tax very high income — or accumulated wealth — in a country where money can move faster than most people can follow it?
The revenue came in
The Massachusetts Fair Share Amendment imposed an additional 4 percent tax on the portion of annual taxable income above $1 million. It is not, strictly speaking, a tax on millionaires. It is a tax on million-dollar income. That difference matters. A wealthy person with little realized income in a given year may owe little or nothing under the surtax.