Massachusetts voters could soon have the opportunity to directly influence their income tax rates and refund policies. Two initiatives, backed by business interests, have successfully cleared a significant procedural milestone, allowing them to seek placement on the 2026 state ballot. The proposals aim to lower the state income tax from 5% to 4% and modify the existing law regarding taxpayer refunds on surplus revenues.
The Mass Opportunity Alliance (MOA), the organization spearheading these initiatives, announced the collection of over 87,000 signatures for the income tax reduction proposal. This number exceeds the required 75,000 signatures necessary to advance the question to the next stage. The deadline for submitting these signatures for verification was on March 15, 2024, and MOA claims to have met this requirement successfully.
In addition to the income tax cut, MOA has gathered more than 86,000 signatures for a separate ballot question aimed at revising the state law known as 62F. This law mandates refunds to taxpayers when state revenues exceed a predetermined threshold. Since its implementation in 1986, the law has only been activated twice, most recently in 2022, returning nearly $3 billion to taxpayers. Supporters assert that amending this law could have meant 24 refunds to taxpayers since its inception.
The MOA was established in response to the introduction of the so-called millionaires tax in 2022, which imposed a surcharge on high earners. The group is composed of several prominent business advocates, including the Massachusetts High Technology Council and the Massachusetts Competitive Partnership. According to Chris Anderson, president of the high-tech council, the strong signature collection reflects a public desire for a shift in state fiscal policy.
Should the signatures be certified, Massachusetts lawmakers will have until May 2024 to address the proposed measures. If no action is taken, MOA will need to collect an additional 12,500 signatures to ensure the questions are placed before voters in the fall of 2026. The organization argues that current tax policies, including the millionaires tax, undermine the state’s competitiveness in attracting and retaining businesses.
The Washington-based Tax Foundation supports this viewpoint, noting that Massachusetts has consistently ranked among the 10 least business-friendly states for taxation since the millionaires tax was enacted, despite some incremental reforms in 2023. Anderson remarked, “Even other organizations that aren’t with us recognize that we have a competitiveness problem.”
Opponents of the proposed tax cuts, including those from the Massachusetts Budget & Policy Center, argue that such reductions would lead to significant budget shortfalls. Phineas Baxandall, policy director at the center, described the proposal as “reckless,” asserting that cutting the income tax by 1 percentage point would reduce state revenues by nearly $5 billion. He emphasized that the resulting budget cuts would disproportionately affect lower-income families.
Experts such as Evan Horowitz, executive director at Tufts University’s Center for State Policy Analysis, warned that the implications of such tax cuts could severely impact funding for essential services, particularly in education and healthcare. “If you’re going to cut an amount of that size, it’s going to come from schools and insurance,” he stated.
As the initiatives continue to progress, both supporters and detractors will prepare for the upcoming debate surrounding these significant fiscal changes. If all goes as planned, Massachusetts voters will ultimately decide the fate of these proposals in the 2026 statewide ballot, marking a critical moment in the state’s economic policy landscape.