Massachusetts Fumbles the Tax Ball
For the latest evidence that state tax policy influences taxpayer decisions, take a look at the National Football League. On Monday former New England Patriots coach and general manager Bill Belichick explained that states with millionaire surtaxes like Massachusetts are at a disadvantage in attracting the best free-agent players.
It’s “just another thing you’ve got to contend with in negotiations up there,” Mr. Belichick added. “It’s not like Tennessee or Florida or Nevada or some of these teams that have no state income tax. You get hit pretty hard on that with the [players’] agents. They’ll come and sledgehammer you down about . . . the tax they’re paying.”
Massachusetts used to have a 5% flat tax on all incomes above $8,000. But in 2022 the state imposed a four percentage point surtax on incomes over $1 million. The Patriots are way under the NFL salary cap and have money to outbid other teams for top talent. But they have recently lost out on free agents they were reported to be courting.
Taxes may not have played a role in those cases, and pro athletes make team decisions for many reasons, from championship prospects to management to weather. But most have a short career horizon for high-dollar earnings. The state tax delta is not a rounding error.
