In 2011, I wrote a blog post based on an analysis by the Massachusetts Budget and Policy Center, of how Massachusetts ranked in terms of amount of taxes collected. They found that at the time state and local taxes 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.
While this chart indicates that Massachusetts could no longer be fairly called “Taxachusetts,” it didn’t tell the whole story. As Massachusetts had moved to cut taxes, it had often made up the difference by raising user costs — for instance, automobile registration fees, state college tuition, MBTA fares.
Some Follow-Up Questions
This raised two important questions that I couldn’t answer:
First, where did Massachusetts rank if such fees were included in the calculation?
Second, what did these fees do to skew the fairness of our tax system — did they make it more regressive or more progressive?
A third question: How have things changed since 2011, especially with the enactment of the “millionaire’s” tax?
Today?
A lot depends on what and how you count. The Tax Foundation calculates that Massachusetts collects the ninth most in taxes of any state, at $5,900 per capita in 2023. But, of course, we’re a high cost and high income state, so it might not be totally fair to compare dollar amounts.
WalletHub finds that Massachusetts today has the 13th highest tax burden as a percentage of income, perhaps edging higher since the MassBudget report in 2011. It finds that our overall state and local tax burden as a percentage of income is 9.57% The most expensive state is Hawaii at 13.92% and the least in terms of taxes is Alaska at 4.93%.
An analysis by Nolo ranks Massachusetts as having the 15th highest tax rate as a percentage of income at 10.5% of income. It ranks New York as the most expensive and Alaska as the least.
So it looks like there’s some consistency. Massachusetts has among the higher overall tax rates but by no means the highest.
But back in 2011, MassBudget was making the claim that Massachusetts taxes were less than the national average. Is that still true today?
The Tax Policy Center of the Urban Institute and the Brookings Institution provides an answer. It finds that in 2021 state and local taxes consumed 9.88% of personal income on average nationwide and in Massachusetts they accounted for 9.7% of personal income. But we’ll have to get some updated numbers showing where we stand after implementation of the millionaire’s tax. (The Tax Policy Center chart also shows that Massachusetts taxes totaled 13.24% of personal income in 1977, perhaps when we did deserve to be called “Taxachusetts.”)
Again, none of these analyses appear to take into account other state fees or, of course, quality of life.