When Massachusetts voters approved the Fair Share Amendment in November 2022 — a 4% surcharge on annual income above $1 million — they were told it would raise roughly $1.3 billion a year for education and transportation. Critics warned of a wealthy exodus. Supporters predicted the revenue would come in steadily and the feared migration would prove overstated.
Three years of actual data are now available. The reality, as is often the case in policy, is more complicated than either side predicted — and it has direct implications for every state now considering a similar move.
The revenue story: significantly better than projected
On pure revenue, Massachusetts has beaten expectations at every turn.
Since taking effect in January 2023, the surtax has generated approximately $5.7 billion in certified cumulative gross collections through the end of fiscal year 2025 (June 30, 2025), according to Massachusetts DOR certified surtax reports: an estimated $242 million in the partial first fiscal year (FY2023), $2.460 billion in FY2024 (certified December 6, 2024), and $2.987 billion in FY2025 (certified July 21, 2025). Partial FY2026 collections through April 2026 have been reported to exceed $3.1 billion for that year alone, per the Boston Globe citing Massachusetts DOR data (May 2026) — putting the multi-year cumulative total well above $6 billion inclusive of FY2026 to date. All figures represent estimated gross collections as certified by the Massachusetts DOR and are subject to revision.
Under Massachusetts law, all surtax revenue is constitutionally earmarked for education and transportation. The state has used those funds to expand public school programs, infrastructure investments, and the Working Families Tax Credit. Supporters point to these numbers as evidence that the sky-is-falling migration predictions were wrong.
The threshold has also risen with inflation. When the surtax first took effect, the $1 million floor was literal. By 2025, the inflation adjustment had moved that threshold to $1,083,150 — meaning someone earning between $1 million and just over $1.08 million no longer pays the surcharge at all.
The migration story: real, but not catastrophic — yet
Here’s where it gets more nuanced. IRS Statistics of Income migration data — released February 2026 and covering tax year 2022–2023, the first full year the surtax was in effect — showed a net outflow of approximately $4.2 billion in adjusted gross income (AGI) from departing Massachusetts residents, an 8% increase from the prior year’s $3.9 billion. (Source: IRS SOI Migration Data, tax years 2022–2023; as reported by InvestmentNews and the Boston Globe, March 2026.) Two methodological notes matter here: the IRS tracks AGI outflows among taxpayers reporting $200,000 or more — a bracket substantially broader than the sub-$1 million threshold at which the surtax actually applies — and net AGI outflows from Massachusetts were actually higher in 2021–2022 than in 2022–2023, complicating direct causal attribution to the surtax. The data reflects migration patterns, not confirmed tax-motivated departure. That’s not a rounding error.
Surveys of former Massachusetts residents who relocated to Florida or New Hampshire after the tax passed found that over half earned $150,000 or more annually, and nearly 74% earned more than $100,000. The people leaving aren’t middle-income earners seeking warmer weather — they’re disproportionately the taxpayers the surtax was designed to reach.
At the same time, a May 2025 report by the Institute for Policy Studies and State Revenue Alliance — analyzing proprietary data from Wealth-X — found that the number of individuals with at least $1 million in total net worth in Massachusetts rose by 38.6% between 2022 and 2024, from 441,610 to 612,109. (Source: Institute for Policy Studies, Wealth Expands After Higher State Taxes on High-Income Earners, April 28, 2025; ips-dc.org.) A methodological note: the Wealth-X dataset measures total net worth including home values, investment accounts, and private business interests — not annual taxable income. An individual whose home or portfolio appreciated significantly during this period could appear in the millionaire count regardless of whether they earned income above the surtax threshold. Critics of the study have noted this distinction as a limitation of using net worth growth to assess surtax migration effects. Defenders of the tax cite this as proof that the exodus wasn’t material. Critics counter that the state’s millionaire growth rate significantly lagged competing states during the same period. According to a Tax Foundation analysis published April 29, 2025, the number of federal income tax returns filed with adjusted gross income of $1 million or more grew by 36% in Massachusetts between 2018 and 2022 — well below the national average of 49%, and far behind Texas (61%), Arizona (75%), and Florida (77%). (Source: Tax Foundation, Taxes Still Affect Economic Growth, Contrary to Findings of Flawed IPS Study, April 29, 2025; taxfoundation.org. Data drawn from IRS Statistics of Income returns; metric is individual federal tax returns reporting AGI of $1 million or more; period is calendar years 2018–2022.) A significant methodological limitation applies: the 2018–2022 comparison period predates the Massachusetts surtax entirely — the surtax took effect January 1, 2023 — meaning these figures measure pre-surtax millionaire growth trajectories, not post-surtax migration effects.
So the honest answer is: the tax raised more money than expected, some high earners left, the ones who stayed grew wealthier, but Massachusetts is clearly losing ground relative to the states competing for the same people.
The Washington comparison: same concept, dramatically higher stakes
Massachusetts’ 4% surtax is now the template that other states are pointing to as they build their own proposals. But the comparison has real limits — and the most important one is rate.
Washington’s newly signed millionaires’ tax is 9.9% on income above $1 million. That’s more than twice the Massachusetts rate, in a state with no prior income tax infrastructure, no existing administrative apparatus for income-based collection, and no earned-in-period for high earners to mentally price in before making relocation decisions.
The Massachusetts experience suggests that at 4%, most wealthy residents stay — especially those embedded in Boston’s finance, biotech, and academic ecosystems. Whether the same holds at 9.9%, in a state where the top earners have never paid income tax, is genuinely unknown. Several economists quoted in Washington’s legislative debate noted exactly this: we’re well outside the empirical range of what previous state-level millionaire taxes have tested.
The California amplifier
California is attempting something beyond income taxation entirely. Its 2026 Billionaire Tax Act ballot initiative proposes a one-time 5% levy not on income, but on total net worth — a fundamentally different concept.
Income taxes hit cash flow. Wealth taxes hit the accumulated stock of everything a person owns: their home, their business interests, their investment portfolio, their art, their vehicles. For a founder whose net worth is primarily tied up in a private company — who may have relatively modest liquid assets relative to their paper wealth — a net worth tax can force asset sales or business restructuring just to pay the tax bill.
The California LAO estimated the tax could temporarily raise tens of billions in revenue. The Hoover Institution projected the net effect would likely be negative, once the income tax revenue lost from departing billionaires is factored in. Both projections involve substantial uncertainty.
As of the initiative’s January 1, 2026 residency cutoff, six prominent billionaires had publicly announced departures from California: Google co-founders Larry Page and Sergey Brin (to Florida), venture capitalist Peter Thiel (to Florida), lending magnate Don Hankey (to Nevada), former Uber CEO Travis Kalanick (to Texas), and director Steven Spielberg (to New York City). (Sources: Fortune, March 17, 2026; Yahoo Finance/Fortune, May 2026.) These are publicly announced relocations, not legally adjudicated residency determinations — California’s Franchise Tax Board retains authority to challenge any claimed departure, and whether each individual’s change of domicile is legally effective under California’s multi-factor residency test remains subject to potential audit or dispute. Whether California courts accept those departures is a separate question — but the behavioral response to the proposal was immediate and substantial.
What the data actually tells us for financial planning
Three lessons emerge clearly from the Massachusetts data:
Revenue from millionaire taxes can significantly exceed projections — particularly in the short run, and particularly when high earners have timing flexibility (accelerating income before the effective date, for example) that inflates early-year collections.
Migration is real but measured at modest surtax rates — the 4% rate has not triggered a mass exodus. But it has contributed to Massachusetts losing ground relative to competing states, and the cumulative income outflow is meaningful. Higher rates, like Washington’s 9.9%, are operating in untested territory.
The behavioral responses take years to fully register — founders don’t relocate during legislative session. Business owners don’t restructure their entities the week after a bill passes. The full migration and revenue effects of the 2026 wave of millionaire taxes won’t be visible in the data until 2028 or 2029. By then, the planning window will have narrowed dramatically.
The right time to act is before everyone else is acting
The irony of state tax migration is that the optimal time to establish new domicile is exactly when the policy environment looks like it’s about to change — not after it already has. In the months after a millionaire tax becomes law, residency auditors get more resources, departure timelines get scrutinized more closely, and the documentation standards for proving you’ve genuinely left get more demanding.
The people who moved from Massachusetts in 2022 and early 2023 — before the surtax took effect — faced relatively smooth transitions. The ones who waited until 2024 or 2025 found themselves operating in a more adversarial environment.
Washington’s effective date is January 1, 2028. California’s ballot is in November 2026. New York’s legislative dynamic is fluid. The planning window is open now, and it won’t stay open.
If you’re evaluating what the right state for your domicile is, the free Florida Domicile Checklist from Moran Wealth Management is a helpful starting point — a practical, step-by-step guide covering the legal, administrative, and lifestyle steps involved in establishing Florida residency. The checklist is educational in nature, addresses Florida-specific requirements only, and is not a substitute for individualized advice from a qualified tax attorney or CPA familiar with your prior state of domicile.