Massachusetts voters may soon have the opportunity to influence their income tax rates and the frequency of state revenue refunds. Two initiatives backed by business groups have successfully passed a significant procedural step, with supporters claiming they gathered sufficient signatures to qualify for the 2026 state ballot. The Mass Opportunity Alliance (MOA), the organization advocating for these measures, announced it collected over 87,000 signatures for a proposal to reduce the income tax rate from 5% to 4%. This figure exceeds the required 75,000 signatures necessary to advance to the next stage.
In addition to the income tax reduction, MOA reported gathering more than 86,000 signatures for a separate initiative aimed at revising the four-decade-old state law known as 62F. This law mandates taxpayer refunds when state revenue surpasses a specified threshold. Since its enactment in 1986, the law has only been activated twice, most recently in 2022, resulting in nearly $3 billion returned to taxpayers. MOA claims that this adjustment could have led to refunds 24 times since the law’s inception.
Launched last year by prominent pro-business advocates, including the Massachusetts High Technology Council and the Pioneer Institute, MOA was formed partly in response to the 2022 millionaires tax, which imposes a surcharge on high earners. Chris Anderson, president of the Massachusetts High Technology Council, stated, “Just based on the ability to collect a large number of signatures, it means there’s an appetite shared by taxpayers/voters that we need a course correction here.”
If the signatures are certified, the Massachusetts Legislature will have until May 2024 to consider the proposed measures. Should lawmakers fail to act, MOA will need to gather an additional 12,500 signatures to bring the proposals before voters in the upcoming fall election. MOA expresses concern that the millionaires tax and other fiscal policies threaten the state’s business competitiveness. The Washington-based Tax Foundation supports this view, categorizing Massachusetts among the 10 least business-friendly states since the introduction of the millionaires tax, despite some tax reforms in 2023.
“Even other organizations that aren’t with us recognize that we have a competitiveness problem,” Anderson mentioned. He also indicated an interest in addressing the Massachusetts estate tax, which is regarded as one of the most burdensome in the country, and expressed readiness to counter efforts from progressive groups aiming to raise taxes on offshore profits.
MOA has established a committee named Taxpayers for an Affordable Massachusetts to manage fundraising for both initiatives. As a 501(c)(6)$27 billion in income taxes during the last fiscal year, representing a significant portion of the state budget. Should the income tax be reduced to 4%, it could potentially decrease revenues by more than $5 billion, phased in over three years. Anderson argues that anticipated economic growth would mitigate much of this revenue loss.
Critics of the proposed tax cuts, including Phineas Baxandall, policy director at the Massachusetts Budget & Policy Center, argue that such a reduction would lead to detrimental budget cuts. He described the proposal as “reckless,” asserting that it would primarily benefit wealthier residents while forcing reductions in programs vital to lower-income families.
Evan Horowitz, executive director at Tufts University’s Center for State Policy Analysis, warned that the tax cut would have “huge implications” for state-funded programs. He noted that the most significant cuts would likely affect education and healthcare, two primary areas of state expenditure.
As these taxpayer-friendly initiatives continue to navigate the ballot process, both supporters and opponents will have to accept the outcome of direct democracy in the 2026 statewide ballot, where voters will express their preferences on these significant financial changes.
