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Massachusetts Taxes Below National Average

By Harry S. Margolis

According to the Massachusetts Budget and Policy Center, Massachusetts state and local taxes in 2011 totaled 10.4% of personal income that year, slightly less than the national average of 10.6%.Twenty states collected a higher percentage of personal income with Arkansas taking in the most at a whopping 20%, perhaps reflecting a low level of income to draw on.

But the comparative income level of states seems to have little overall effect on tax levels with New York coming in the third highest and South Dakota having the lowest tax collections as a share of income.


MassBudget estimates that an increase of .2% to bring revenue to the national average would have raised $650 million for state services.

While this chart indicates that Massachusetts can no longer be fairly called “Taxachusetts,” and that there may be room to raise more revenue for state services, it doesn’t tell the whole story. As Massachusetts has moved to cut taxes in recent years, it has often made up the difference by raising user costs — for instance, automobile registration fees, state college tuition, MBTA fares. This raises two important questions:

First, where does Massachusetts rank if such fees were included in the calculation?

Second, what do these fees do to skew the fairness of our tax system — do they make it more regressive or more progressive?

It would also be interesting to compare the states in terms of source of revenue — income, sales and estate taxes, residential property taxes, and fees.

With these questions answered, Massachusetts taxpayers would be better able to say whether they would be willing to pay a bit more in taxes, perhaps to lower user fees or at least keep them from increasing more.

Click here to read more about MassBudget’s report.

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