Boston Leaders Support 2026 Tax Cut Plans

Massachusetts Business Groups Push for Tax Relief on 2026 Ballot

A coalition of business organizations in Massachusetts is working to get two new tax-relief proposals on the ballot for the 2026 election. These initiatives aim to address concerns about the state’s high costs, which many believe are hurting its economic competitiveness.

The Massachusetts High Technology Council and the local chapter of the National Federation of Independent Business were among the first to sign onto a proposal that would gradually reduce the state income tax from the current rate of 5% to 4%. Another proposal, supported by the same business groups along with the Retailers Association of Massachusetts, would place a limit on how much tax revenue can be collected in any given year.

These proposals still have a long path ahead. Before they can be put before voters, they must first be deemed constitutional by the state attorney general’s office. After that, supporters will need to collect signatures from more than 85,000 residents.

It has been over a decade since the last successful tax-cut ballot initiative in Massachusetts. That was a campaign to repeal a law tying the gas tax to inflation. In 2022, voters approved a so-called millionaires tax on personal income over $1 million.

Business leaders believe that the impact of high inflation in recent years could increase support for these tax cuts. Executives in the Boston area have warned that the region’s high cost of living is making it less attractive, prompting both residents and companies to move to lower-cost areas. A decade ago, Massachusetts ranked in the middle of the Tax Foundation’s national tax-climate rankings. Today, it is rated as one of the worst.

Christopher Anderson, president of the Massachusetts High Technology Council, said, “The state budget has been growing at a rate much greater than household income, and ultimately that’s not sustainable.” He added that there is widespread recognition that the multitude of taxes in Massachusetts is creating a competitive barrier to growth.

According to a July poll conducted by the Mass Opportunity Alliance, three-quarters of Massachusetts residents support an income-tax cut, while a similar percentage back the cap on tax collections. The poll found that even those earning less than $50,000 annually showed strong support for the income-tax cut, though those making more than $100,000 expressed the strongest backing.

The Mass Opportunity Alliance includes the technology council, the Pioneer Institute public policy research organization, and the Massachusetts Competitive Partnership. Prominent business leaders such as Fidelity Investments CEO Abigail Johnson, New England Patriots owner Robert Kraft, and State Street Corp. CEO Ronald O’Hanley serve on the board of the latter organization. While each executive may not endorse every initiative, the partnership uses their collective influence to push for changes in tax, workforce, and other state policies.

While the proposed income-tax cut would ease some of the burden of the millionaires tax, the surtax has been a point of contention. Supporters argue it helps fund education and transportation, while opponents claim it drives high earners out of the state. The tax has generated significant funds, including about $3 billion in the fiscal year ending in June.

The second proposal aims to cap the state’s tax revenue based on annual wage and salary growth. Any excess collections would be refunded to taxpayers. Massachusetts already has a similar cap, but it has only been triggered twice in the past four decades. According to an analysis by the Mass Opportunity Alliance, the new proposal would trigger refunds 24 times over the past 40 years.

Ballot initiatives can be costly, with supporters spending on staff to collect signatures and funding advertisements and mailers to sway voters. For example, proponents of the millionaires tax raised nearly $29 million for that campaign.

Other proposals for the 2026 ballot include a statewide rent control measure and changes to zoning rules to make it easier to build starter homes. The rent control proposal, backed by tenant advocates, would limit rent increases to the annual percentage gain in the Consumer Price Index, with a 5% cap.