Massachusetts 'not progressive' in how it taxes lower, middle-income households: study

Tim Dunn, Boston Herald on Jun 25, 2026

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BOSTON — Paying the bills is not a party, a new report reveals.

The Pioneer Institute says the Bay State is not as progressive as its political leadership makes it out to be when it comes to taxing lower-and middle-income families.

That conclusion follows the Supreme Judicial Court's striking down of the Massachusetts ballot initiative that would have lowered the state income tax.

The Boston-based nonprofit think tank points to a recent study it conducted that found Massachusetts taxes a far larger share of income from “typical families” than competing states, while offering residents relief through a “patchwork of credits” rather than a broad, wide-ranging tax relief.

The study, called “Universal or Targeted? Is Massachusetts an Outlier in How It Delivers Tax Relief to Lower- and Middle-Income Households?” concludes that the vast differences in Massachusetts’ tax policy “could have implications for competitiveness, fairness, transparency, and migration.”

“States like North Carolina shield nearly three times as much income from taxation as Massachusetts does,“ said study co-author Aidan Enright. “Massachusetts prides itself in supporting lower income populations, but many states provide considerably more broad-based tax relief to lower- and middle-income families.”

The Pioneer Institute study says the state’s personal exemption remains at just $4,400 for single filers and $8,800 for married couples filing jointly, adding that these parameters have not been changed since 2008, declining in inflation-adjusted value by a whopping 55%. The Institute goes on to say that if Massachusetts rates had been adjusted for inflation, its taxpayers would have saved an additional $861 million in 2025.

That compares to the $12,750 tax shield for single filers in North Carolina and the $25,000 for married couples filing jointly in the Tar Heel State. Neighboring states, like Maine, are more generous with providing tax protections to its residents, with single filers allowed to deduct up to the equivalent of $20,150. In Rhode Island, single filers receive an astounding $16,000 shield.

Meanwhile, the federal standard deduction shields single filers and married couples with $15,750 and $31,500, respectively.

“Massachusetts politicians speak the language of progressivism, but our tax code tells a different story. We dispense tax relief with an eyedropper — and expect families to navigate a maze of credits and deductions,” said Pioneer Institute Executive Director Jim Stergios. “For lower- and middle-income families, having to hire a tax professional to understand the maze of rules is just another kind of tax. They need broad-based relief.”

The study says, for example, a married couple earning a combined $100,000 per year is taxed on $91,200 of their income in Massachusetts compared to just $74,500 for North Carolina residents – a difference of $835 in additional taxes for Bay State couples. Considering North Carolina’s 3.99% income tax rate, the difference nearly touches $1,400 per year.

This has resulted in the state taxing typical households at significantly lower income levels than many competing states.

Meanwhile, Massachusetts offers relief by mostly relying on collections of targeted credits and deductions, which include deductions for renters, seniors, children, commuters, student-loan borrowers and more. But the Pioneer Institute says that because those credits are not universal, it makes the eligibility process extremely complex.

“The report recommends doubling the Commonwealth’s personal exemption and indexing it to inflation, as several states have done. The study estimates that the change would reduce revenues by approximately $1.2 billion annually and could be phased in over several years to minimize fiscal disruptions,” Enright wrote in the study. “While it would not provide relief on the scale of the proposed ballot initiative, the reform would represent an important step toward broader, simpler, and more transparent tax relief.”

The Institute is also calling for a review of the state’s tax deduction and credit system.

The study comes just days after the SJC struck a ballot initiative from the November ballot that would have gradually lowered the state income from 5% to 4%, citing a “misleading summary” of the proposal authored by Attorney General Andrea Joy Campbell’s office.

Specifically, it would have set both tax rates at 4.67% for tax year 2027, 4.33% for tax year 2028, and 4% beginning in tax year 2029, something the Institute says is desperately needed as Massachusetts continues to see record levels of outmigration among residents and businesses.

Since 2020, Massachusetts has seen a net domestic outmigration of 182,000 residents, particularly between the ages of 26 and 34, the Pioneer Institute says. This as Massachusetts continues to experience declining job growth, joining only a handful of other states that has continued to lose jobs since the end of the COVID-19 pandemic.