By John L. Micek
masslive.com
(TNS)
What happens if state voters approve a fall ballot question asking them if they want to shave Massachusetts’ 5% income tax down to 4%?
Nothing good, according to a new study out Wednesday by Tufts University’s Center for State Policy Analysis.
That single percentage point would mean a $5.1 billion hit to the Bay State’s bottom line. That would force policymakers to make deep cuts to such essential services as schools and health care, even as they hand a tax break to the commonwealth’s richest residents.
The new data further intensifies what is becoming one of the most contentious—and most expensive—debates of the 2026 campaign season.
Business groups backing the tax cut have argued it’s needed to preserve the state’s competitiveness and to staunch an exodus of residents fleeing costly Massachusetts for more consumer- and tax-friendly climes.
Opponents say it’s a tax hit that the state can’t afford to take during an uncertain economy and shifting financial winds in Washington, D.C.
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“We’re already facing $3.5 billion in annual cuts to Medicaid to pay for Trump’s tax breaks for the ultra-rich at the federal level,” Harris Gruman, the chair of the Protect Massachusetts’ Future ballot committee, which is leading the opposition, said.
“Forcing the largest state budget cuts in history in this fragile moment would be an absolute disaster for Massachusetts. Voters won’t be fooled by the right-wing radicals who are trying to bring the Trump tax cut agenda to our state,” Gruman, also the executive director of the SEIU Massachusetts State Council, said.
The Tufts study concluded, among other things, that:
- The median household tax bill would shrink by about $1,250 a year, if voters approve the ballot question.
- State income tax collections would drop by 20%, while total state collections would drop by 10%. And a cut of that size would “more than offset the revenue gains from the millionaires tax and imperil efforts to balance the state budget and sustain core government programs,” the report found.
- Households across the income spectrum would keep an additional 1% of their income. But that distribution would look “quite different in dollar terms, with the highest-earning households getting a tax cut about 30 times the size of the median household,” the report found.
And because the tax cut would be phased in over three years, starting on Jan. 1, 2027, it would create a “serious planning problem for lawmakers, who are already building next year’s budget and cannot know whether revenues will suddenly drop,” the report also found.
The report “confirms that the income tax cut ballot initiative is a massive giveaway to the ultra-rich that would leave the rest of us stuck holding the bag. While those earning over $1 million a year would see their state taxes cut by an average of $37,000, low- and middle-income taxpayers would get relative pennies,” Gruman said.
Polling data released last week by the Massachusetts Opportunity Alliance, which is backing the ballot question, pointed to broad business community support for shaving a point off the income tax.
More than 9 out of 10 respondents (92%) to the survey of 153 business owners said the savings from an income tax cut would help them manage their expenses more efficiently.
That included 93% of so-called “pass-through” entities, or businesses that avoid corporate taxes by having their owners report profits, losses and tax liabilities on their personal tax returns. You’d recognize them as LLCs or “S” corporations.
The survey is “further evidence of what we have been hearing every week from our 4,000 members: sales are down and costs are up due to the affordability crisis in Massachusetts,” Jon Hurst, the president and CEO of the Retailers Association of Massachusetts, which is part of the MOA, said in a statement.
Photo credit: Jill_InspiredByDesign/iStock
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©2026 Advance Local Media LLC. Visit masslive.com. Distributed by Tribune Content Agency LLC.
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Tags: income tax cuts, Income Taxes, massachusetts, Taxes
