October 17, 2018

Massachusetts: Who Pays? 6th Edition


MASSACHUSETTS

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MASSACHUSETTS STATE AND LOCAL TAXES

Taxes as Share of Family Income

Top 20%
Income Group Lowest
20%		 Second
20%		 Middle
20%		 Fourth
20%		 Next
15%		 Next
4%		 Top
1%
Income Range Less than
$23,100		 $23,100 to
$44,300		 $44,300 to
$74,600		 $74,600 to
$131,100		 $131,100 to
$279,600		 $279,600 to
$719,500		 over
$719,500
Average Income $13,000 $33,800 $58,600 $98,700 $183,600 $438,100 $2,507,300
Sales & Excise Taxes 4.8% 3.6% 2.7% 2.2% 1.6% 1.0% 0.5%
General Sales – Individuals 2.0% 1.7% 1.4% 1.2% 0.9% 0.6% 0.3%
Other Sales & Excise – Ind. 1.4% 0.9% 0.5% 0.4% 0.3% 0.1% 0.0%
Sales & Excise on Business 1.4% 1.1% 0.8% 0.6% 0.4% 0.3% 0.1%
Property Taxes 5.4% 3.0% 3.1% 3.4% 3.0% 2.4% 1.6%
Home, Rent, Car – Ind. 5.3% 2.9% 3.1% 3.2% 2.8% 2.0% 0.4%
Other Property Taxes 0.1% 0.1% 0.1% 0.1% 0.2% 0.4% 1.2%
Income Taxes -0.2% 2.4% 3.5% 3.9% 4.0% 4.3% 4.5%
Personal Income Tax -0.2% 2.4% 3.4% 3.8% 4.0% 4.1% 4.2%
Corporate Income Tax 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.3%
TOTAL TAXES 10.0% 9.0% 9.3% 9.4% 8.6% 7.7% 6.5%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Massachusetts

Progressive Features

Regressive Features
  • Provides a refundable Earned Income Tax Credit (EITC)
  • Sales tax base excludes groceries
  • “No-tax” threshold and low-income credit eliminate income tax liability for poorest taxpayers
  • Requires the use of combined reporting for the corporate income tax
  • Levies a state estate tax
  • Personal income tax uses a flat rate
  • Fails to provide a property tax “circuit breaker” credit for low-income, non-elderly taxpayers
  • Comparatively high cigarette tax rate

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Massachusetts has the 30th most unfair state and local tax system in the country. Incomes are more unequal in Massachusetts after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the methodology section for additional detail on the index.)

Note: Figures show permanent law in Massachusetts enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.