Press Release: 4/6/2026

FACT CHECK: Income Tax Cut Won’t Cost $5 Billion

This week, the Massachusetts Special Joint Committee on Initiative Petitions held a hearing on two proposed laws: an income tax cut from 5% to 4% and a revised state revenue cap.

 

Testimony from the Mass Taxpayers Foundation claimed that lowering the income tax rate would create a $5 billion hole in the state budget. This claim has been echoed in similar analyses from the Tufts Center for State Policy Analysis, and from advocacy groups opposed to any tax relief.

 

MOA’s research – also cited at the hearing – reaches a different conclusion, finding this policy would have a modest impact on state income tax revenues in the phase-in years, and also help our economy grow faster long-term.

 

 

What sets MOA’s analysis apart from other reports?

 

Other estimates of how an income tax cut would impact the Commonwealth don’t account for two key things:

 

1) The history of how the Massachusetts’ budget has operated and adapted to past tax cuts.

 

2) A dynamic look at our economic future and how a tax cut would stimulate the overall economy.

 

The lesson is straightforward: Alarming estimates of what an income tax cut would cost the state may grab headlines and spark fear. However, they do not reflect Massachusetts’ history with tax cuts, taxpayer behavior, or economic conditions.

 

As of 2026, more than half of U.S. states have cut income taxes. Many of them have seen a net gain in residents – while Massachusetts continues to see net outmigration.

 

The history of the Commonwealth shows the state can provide meaningful tax relief while maintaining a stable and growing revenue base.

 

Our latest analysis breaks it down here.