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DO MILLIONAIRE SURTAXES LEAD TO MILLIONAIRE EXODUS?  
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Richard Solomon
November 17, 2025
The People's Policy Project
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_ Assessing the Massachusetts millionaire’s tax three years on. _

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November 2025 marks the three-year anniversary of Massachusetts voters
approving a four percent surtax on annual incomes above $1 million.
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The ‘Fair Share’ amendment has been a reference for New York City
mayor-elect Zohran Mamdani, who has called for an additional 2% tax on
city incomes over $1 million to fund his affordability agenda.
Predictably, critics make gloomy prophecies of economic blight and
elite exodus: Bill Ackman and 26 other billionaires spent big on
Mamdani’s opponents, the Cato Institute called his tax plans
‘wishful thinking,” and Andrew Cuomo threatened to depart for
Florida.

Massachusetts voters heard the same arguments in 2022. Spearheaded by
Patriots owner Robert Kraft, New Balance’s Jim Davis and Boston
investment firm CrossHarbor Capital Partners, the opposition argued
that Fair Share would not address the state’s fiscal needs; it would
create tax flight and punish homeowners selling on the market. Three
years on, what are the effects of the millionaire tax? The evidence is
that Fair Share revenue has exceeded expectations: it’s repaired
bridges, funded bus routes, hired teachers, and made community college
and school meals available to all. There has been no significant
outmigration of the wealthy. In fact, the number of millionaires by
net worth has increased by over 30%, and the outward tide of non-rich,
young workers has slowed.

Making Massachusetts Nice

Since 2022, Massachusetts generated $5.7 billion from the tax —
$2.46 billion the first
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full fiscal year and $2.99 billion the second
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— doubling initial forecasts.
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For FY2025, Fair Share revenue made up about 5% of the total state
budget. Revenue has been spent on education and transport
infrastructure, as required by the amendment. Early evidence is that
Massachusetts is using the funds to supplement, not offset its
education spending:

Figure 1: Massachusetts Education Funding by Year, Adjusted for
InflationSource: MA State Legislature

The share might appear small, but the results are impressive. With
Fair Share funds, Massachusetts has maintained pandemic-era funding
levels for childcare, expanded pre-K programs, and invested $20
million in early literacy. Breakfast and lunch were made free for all
Massachusetts school children starting in 2023. Another $160 million
has gone toward school building improvements. Fair Share has made
tuition-free community college universal for all Massachusetts
residents and expanded financial aid through the UMass system. The
state is now considering
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$200 million of Fair Share funds to backfill federal cuts to research
and innovation at public universities.

Fair Share has strengthened transit. According to the governor
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$250 million of Fair Share revenue has been allocated to the
Commonwealth Transportation Fund, expanding its bond capacity by $1.1
billion. Such financing has been used to replace 76 kilometers of
urban commuter rail, remove 200+ speed restrictions, repair 20
bridges, and maintain rural roads. Another $345 million has supported
the Massachusetts Bay Transportation Authority, used to expand ferry
services, train machinists, and pilot fare-free programs. Regional
transit authorities received $200 million in Fair Share funds, which
are used to make buses free, expand operating hours, and hire drivers.

EXPENDITURE CATEGORYFY24 PERCENTFY25 PERCENTChild Care and Pre-K
Education7%21%K-12 Schooling22%19%Tertiary Education23%19%Roads and
Bridges18%3%Public Transit30%19%Commonwealth Transportation Fund
(CTF)0%19%

Figure 2: Fair Share revenue allocation by expenditure category

Thanks in part to programs funded by Fair Share, Massachusetts has
stemmed
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the tide of departing working families and young people
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THE MILLIONAIRE HOMESTAY

After two and a half budget cycles, Fair Share revenue attests to the
fact that Bay State millionaires are staying and paying. IRS tax
returns reveal the number of filers reporting adjusted gross incomes
above $1 million has generally climbed, although as of writing the IRS
hasn’t released individual filing data from 2023:

Figure 3: Number of IRS tax returns in Massachusetts with an AGI of
$1M+ (2012-2022)Source: IRS Statistics of Income program

So what about after 2022? To get around the income data availability
issue, one study
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in April examined proprietary data on _net worth_ from Wealth-X. It
found the Massachusetts population reporting net worth above $1
million has grown 39% from 441,610 individuals to 612,109 in the past
three years. The number of residents above $50 million in wealth has
grown 35% from 1,954 to 2,642 individuals. Finally, the number of
billionaires in Massachusetts on the Forbes 400 list has climbed from
7 to 9 between 2022 and 2025.

These data clash with the dire protestations of the wealthy themselves
and their popular image as rootless jet-setters anxious to move,
gravity-like, to the lowest tax environment. Have we misjudged them?
As economic sociologist Cristobal Young explains
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much of wealth accumulation is still rooted in place and insider
advantage, while a host of sociological considerations tie wealthy
people down during the peak income years.
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It is the young and lower-income who are much more likely to move:

Figure 5: Young et al. (2016) Estimates of Migration Rates by Income
Level, 1999 to 2011Source: U.S. Department of the Treasury, IRS
microdata, 1 percent sample of all tax filers (N = 24 million) and 100
percent sample of people making $1 million or more (N = 45 million).

Moreover, according to Young’s study, the majority of movers above
the $100,000 annual income mark are departing to states with the same
or higher tax burden.

THE FUTURE OF MILLIONAIRE TAXES

Fair Share has been a fiscal success in Massachusetts, but the future
of using state income taxes to reform our way into social-democratic
paradise is still unclear. For one, revenue generated is small
compared to sales taxes. It will not offset $1 trillion in federal tax
cuts to the wealthiest Americans. Massachusetts’ 9% top marginal
rate is lower than New Jersey’s (10.75%), New York’s (10.90%), and
California’s (13.30%). The state tax burden, like most states, is
still _regressive_: the middle 60% of families on the income
distribution pay about 9.7% of their annual budget in state taxes
while the richest 1% pay 8.9%. This happens because the rich can
afford to save their incomes while those lower down have to spend a
higher portion of their budgets in the real economy, catching
consumption taxes in the process.

economy, catching consumption taxes in the process.

RANKSTATELOWEST 20%MIDDLE 60%TOP 1% TOP 1% – BOTTOM
20%1Minnesota6.2%11.8%10.5%+ 4.3%2Vermont6.3%10.1%10.1%+ 3.8%3New
York11.1%9.8%13.5%+ 2.4%7MASSACHUSETTS8.2%9.7%8.9%+
0.7%48Tennessee12.8%9.4%3.8%– 9.0%49Washington13.8%10.2%4.1%–
9.7%50Florida13.2%9.1%2.7%– 10.5%

Figure 6: State tax burden as a share of family income by position in
the income distribution, 2025

On a political level, passing Fair Share was a Herculean effort that
squeaked by at 52% yes-vote, even in deep-blue Massachusetts. This
might present a challenge for those seeking to replicate the strategy
elsewhere. I spoke with Jonathan Cohn, policy director at Progressive
Mass, as well as Enid Eckstein who served on the steering committee
for the organization Raise Up that led the fight for Fair Share.
According to them, Raise Up created
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a winning coalition for the amendment, backed by service worker,
building, and teacher unions, even the AFL-CIO. The campaign survived
a Supreme Court objection by finding a runaround through
constitutional convention. Raise Up came out early on TV ads,
canvassed nearly a million doors, and had disciplined messaging on
earmarking funds and the home-selling issue.

The wealthy were caught off guard by the amendment’s passage. Cohn
told me that right-wing interests, having realized that repealing the
millionaire surtax is a losing battle, are now collecting signatures
to reduce state income taxes as a whole. According to Eckstein, the
task ahead is not just staving off relapse to a more regressive tax
structure but extending progressive gains to a corporate fair share
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tax on excess profits concealed offshore. Finally, as the People’s
Policy Project has argued, further inroads against inequality and
poverty will require plans to socialize capital income
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and fund generous welfare states
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What this means is that if you live in Massachusetts, you pay 5% of
your annual income up to $1 million. If you make any more than that,
you pay 9% on income above a $1 million. This is in addition to the
state sales tax and local property taxes, which you pay directly as a
homeowner or indirectly as a renter.

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These include forecasts by the Department of Revenue
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‘fiscal responsibility’ skeptics
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and the amendment’s own advocates
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A New England billionaire might dream of living on an island in the
Florida Keys or buying a fiefdom in Alaska, but that doesn’t mean
his spouse or children or friends want to go live there with him. The
highest paid lawyers, surgeons, and consultants forge their
reputations and client base in particular cities or regions. To move
to Florida means walking away from their professional networks or
leaving the most prestigious jobs in their field.

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* Massachusetts Fair Share Amendment; State tax on high incomes;
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