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Massachusetts has been nicknamed “Taxachusetts” since the 1970s due to the perception of high state taxes, particularly at that time. The term was popularized in response to a combination of high income, property, and sales taxes, which many residents and critics considered excessive compared to other states. The nickname reflected frustrations with the state’s tax policies and was often used in political rhetoric to advocate for tax reform and reductions.
Although Massachusetts has since enacted tax reform, the nickname historically refers to 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 moved to Florida, and most of my neighbors where I live are from my hometown of Boston. We can’t afford to live there anymore.”
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It’s not just O’Leary who’s tossing around the Taxachusetts name. Bill Belichick, who coached the New England Patriots to six Super Bowl victories, recently called the state Taxachusetts when weighing in on the impact of a tax rule he says could prevent the state from attracting top sports talent.
For 2023, the state introduced what’s called the millionaire tax, an additional 4% levy on taxable income above $1,000,000. The tax threshold will increase each year, in line with inflation. The tax generated $2.2 billion in fiscal 2024 for the state, drawing income from CEOs, professional athletes and other wealthy individuals. In addition to the tax, the state also has the fifth-highest property taxes in the country.
On the Pat McAfee show, Belichick said the tax could hamper local teams’ ability to sign top players, since nearly every player, even those on the practice squad, would have to pay state taxes. “It’s just something else you have to deal with in the negotiations there,” he said. “It’s not like Tennessee or Florida or Nevada, or some of these teams don’t have state income tax. So you get hammered pretty hard by the agents there. They come and give you a hard time about the taxes they pay.”
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Belichick isn’t the only sports-related figure to speak out about the tax’s impact. Steve Pagliuca, formerly of Bain Capital and co-owner of the Boston Celtics, left Massachusetts for Florida last year, selling his home for $8.8 million. Pagliuca has said the tax wasn’t a factor in his move. He left because he was retiring from Bain Capital and already lived mostly in West Palm Beach. Pagliuca told the Boston Business Journal that taxes play a role in hiring, and said “punitive tax measures” can make it more attractive for high-income earners to move to lower-tax states.
In a story about 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 are likely to change their behavior, whether they leave the state or get more creative with hiding their money. It could take a few years to see whether the tax actually drives 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, including former Patriots star Tom Brady, Florida seems like the place to be.
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This article Is Bill Belichick Right About What Happens in ‘Taxachusetts’? originally appeared on Benzinga.com
