Massachusetts has a strong economy on paper, but its future prospects are looking shaky according to the newly-released Rich States, Poor States report, based on the fiscally conservative ALEC-Laffer State Economic Competitiveness Index..The report says Massachusetts had a below-average economic performance from 2013 to 2023, ranking 27th out of 50 states. The state did relatively well in gross domestic product growth, ranking 19th — but that wasn’t enough to boost its overall performance, which also factored in domestic migration and job growth.Looking ahead, the report casts doubt on the state’s economic future. ALEC-Laffer ranked Massachusetts 37th in economic outlook, signaling that it expects the state to fall further behind in the coming years.There are several reasons the report offers for taking a negative view of Massachusetts.One is the state’s tax burden. The top marginal personal income tax rate is now 9 percent (seventh-highest in the nation), while the corporate tax rate is 8 percent — both among the highest in the country. Massachusetts also ranks in the top 10 for property tax burden and has no right-to-work law (meaning employees of some businesses can be forced by collective bargaining agreements to pay union dues), which the report sees as a disadvantage in attracting and retaining businesses.Outward migration is another problem. Massachusetts ranked 46th in domestic migration, meaning it had one of the worst population losses in the country over the last decade. While other states gained residents, Massachusetts lost more than 280,000 people to other states.The report also notes that Massachusetts has a $15-an-hour minimum wage; only five states have a higher minimum wage. The report sees a high minimum wage as a disincentive for businesses.Massachusetts also has a high cost of living, which the report says may hurt businesses and workers alike.The state also has an estate tax (also called the death tax) that kicks in after $2 million, one of the lowest thresholds in the country.Massachusetts has struggled in the report's rankings for years. The state hasn’t cracked the top 15 in economic outlook since 2012 and has hovered in the mid-30s since 2021."Massachusetts’ consistently low ranking in the Rich States, Poor States report is sadly not surprising," Christopher Carlozzi, Massachusetts state director for the National Federation of Independent Business, said in a press release. "From crushing unemployment insurance taxes and one of the highest minimum wages in the nation, to excessive state and local taxes, to burdensome labor mandates, Massachusetts’ small business owners need policymakers on Beacon Hill to show leadership for Main Street shops and job creation.""If the Commonwealth's legislators want to improve our small business climate, they must act on these concerns, which are pushing small business owners to the brink, and they should start with fixing our broken unemployment insurance system," he added.Massachusetts Fiscal Alliance executive director Paul Craney also said the state should aim to do better.“Massachusetts can do much better than mediocre,” Craney told NewBostonPost via email. “Our state leaders are not focused on economic growth and trying to compete with the rest of the country. This latest ranking demonstrates this sad fact of reality once again.” The report gives Utah the best economic outlook and New York the worst.The report was issued by the American Legislative Exchange Council, an organization of state legislators "dedicated to the principles of limited government, free markets, and federalism."American Legislative Exchange Council president and chief economist Jonathan Williams said the report shows people want to live in low-tax, business friendly states -- not high-tax states.“As Washington attempts to tackle debt and dysfunction, the states remain America’s last line of defense for fiscal responsibility and economic growth,” Williams said in a press release. “Rich States, Poor States once again illustrates that Americans vote with their feet — leaving high-tax, high-regulation states in favor of those embracing low taxes, balanced budgets, and worker freedom. The states leading our rankings thrive because they put the people first.”
Massachusetts has a strong economy on paper, but its future prospects are looking shaky according to the newly-released Rich States, Poor States report, based on the fiscally conservative ALEC-Laffer State Economic Competitiveness Index..The report says Massachusetts had a below-average economic performance from 2013 to 2023, ranking 27th out of 50 states. The state did relatively well in gross domestic product growth, ranking 19th — but that wasn’t enough to boost its overall performance, which also factored in domestic migration and job growth.Looking ahead, the report casts doubt on the state’s economic future. ALEC-Laffer ranked Massachusetts 37th in economic outlook, signaling that it expects the state to fall further behind in the coming years.There are several reasons the report offers for taking a negative view of Massachusetts.One is the state’s tax burden. The top marginal personal income tax rate is now 9 percent (seventh-highest in the nation), while the corporate tax rate is 8 percent — both among the highest in the country. Massachusetts also ranks in the top 10 for property tax burden and has no right-to-work law (meaning employees of some businesses can be forced by collective bargaining agreements to pay union dues), which the report sees as a disadvantage in attracting and retaining businesses.Outward migration is another problem. Massachusetts ranked 46th in domestic migration, meaning it had one of the worst population losses in the country over the last decade. While other states gained residents, Massachusetts lost more than 280,000 people to other states.The report also notes that Massachusetts has a $15-an-hour minimum wage; only five states have a higher minimum wage. The report sees a high minimum wage as a disincentive for businesses.Massachusetts also has a high cost of living, which the report says may hurt businesses and workers alike.The state also has an estate tax (also called the death tax) that kicks in after $2 million, one of the lowest thresholds in the country.Massachusetts has struggled in the report's rankings for years. The state hasn’t cracked the top 15 in economic outlook since 2012 and has hovered in the mid-30s since 2021."Massachusetts’ consistently low ranking in the Rich States, Poor States report is sadly not surprising," Christopher Carlozzi, Massachusetts state director for the National Federation of Independent Business, said in a press release. "From crushing unemployment insurance taxes and one of the highest minimum wages in the nation, to excessive state and local taxes, to burdensome labor mandates, Massachusetts’ small business owners need policymakers on Beacon Hill to show leadership for Main Street shops and job creation.""If the Commonwealth's legislators want to improve our small business climate, they must act on these concerns, which are pushing small business owners to the brink, and they should start with fixing our broken unemployment insurance system," he added.Massachusetts Fiscal Alliance executive director Paul Craney also said the state should aim to do better.“Massachusetts can do much better than mediocre,” Craney told NewBostonPost via email. “Our state leaders are not focused on economic growth and trying to compete with the rest of the country. This latest ranking demonstrates this sad fact of reality once again.” The report gives Utah the best economic outlook and New York the worst.The report was issued by the American Legislative Exchange Council, an organization of state legislators "dedicated to the principles of limited government, free markets, and federalism."American Legislative Exchange Council president and chief economist Jonathan Williams said the report shows people want to live in low-tax, business friendly states -- not high-tax states.“As Washington attempts to tackle debt and dysfunction, the states remain America’s last line of defense for fiscal responsibility and economic growth,” Williams said in a press release. “Rich States, Poor States once again illustrates that Americans vote with their feet — leaving high-tax, high-regulation states in favor of those embracing low taxes, balanced budgets, and worker freedom. The states leading our rankings thrive because they put the people first.”
