By Yawu Miller, November 12, 2025
A ballot question backed by the Pioneer Institute and Mass High Tech Council would reduce the state income tax rate from 5 percent to 4 percent over a three-year period — a cut, opponents say, that would cut income tax revenue by 20 percent, leading to a $5 billion reduction in state revenue.
But in a report released last week, the Pioneer Institute asserts that the revenue losses from such a cut would be minimal.
“Critics of the tax proposal are once again trotting out the same simplistic doomsday analysis they did when a proposal to cut the state income tax rate was last on the ballot in 2000,” said Jim Stergios, Pioneer’s executive director in a statement.
“The evidence is clear: a one-percentage-point income tax cut implemented over three years did not cause a dramatic fall in revenues then, and it won’t now.”
According to the institute’s analysis, after an initial drop of $530 million when the rate income tax rate dropped from 5.95 percent to 5.6 percent, revenues stabilized and increased.
“There was no evidence of rate-driven declines across all subsequent years,” reads a summary of the report. “When rate reductions occurred, year-over-year personal-income-tax (PIT) revenues were stable or positive.”
Legislators also revised the mandate in 2002, requiring that the tax rate stay frozen at 5.3 percent until the state’s revenues saw four consecutive quarters of growth. It wasn’t until 2019 that the rate dropped to 5 percent.
MassBudget Reference:
“So, lo and behold, the things that could only happen during good revenue times did only happen in good revenue times,” said Phineas Baxandall, director of research and policy at the Massachusetts Budget and Policy Center.
