By May 25, 2026
Billionaires tax is more like it.
The state’s surtax on its highest earners has already generated more than $3.1 billion in revenue this fiscal year, with still two months to be counted, likely leaving lawmakers with a generous surplus to dole out next spring.
The amount, disclosed in a letter released by the state Department of Revenue, already tops the $3 billion the state collected from the so-called millionaires tax during fiscal year 2025. It also far surpasses the $2.4 billion the state projected to spend from the levy in the fiscal year that ends next month.
The constitutional amendment approved by voters in 2022 applies a 4 percent surtax on annual income “in excess” of $1 million. But the measure also included a trigger linking that seven-figure threshold to any changes in the cost of living, meaning the amount someone has to earn to hit the tax increases with inflation. For tax year 2026, for example, only income over $1.1 million is now taxed.
Before the measure passed on the ballot, the Massachusetts Budget and Policy Center, a left-leaning think tank, projected it could generate at least $2 billion a year.
It’s repeatedly topped that. Around this time last fiscal year, the surtax had already produced $2.6 billion in revenue. The year before, it had produced about $1.8 billion by around this time.
The estimates immediately buoyed supporters’ claims that the surtax would deliver much-needed revenue for the state despite fears it could drive some of the state’s wealthiest residents to move to locales with lower tax burdens.
Additional MassBudget Reference:
Phineas Baxandall, director of research and policy analysis at the Massachusetts Budget and Policy Center, said while the surtax revenue has grown, so too has the Legislature’s reliance on it to fund tranches of the budget, including child-care grants or sending more money to the MBTA.
“While the money is growing, the knowledge of the vitality of this source is growing even faster,” he said, noting that state lawmakers originally budgeted just $1 billion in so-called millionaires tax money, and are now planning to commit $2.7 billion next fiscal year.
