With election day only seven days away, Question 1 continues to make waves. As the largest technology membership organization in the state, MassTLC felt it was important to understand our members’ views on this proposed change to the state’s income tax structure.
In a survey sent to member company CEOs and Presidents, we found that two-thirds of respondents were not in favor of this tax. A majority cited the concern that business leaders, investors, and startups would move to more tax-friendly states. Some also added that a potential loss of these leaders and companies would cause innovation to also suffer.
Of the one-third of respondents who were in favor of this tax, most felt the impact on businesses would be minimal, if any at all, in terms of an exodus. In fact, they did feel that the downstream effect of improving education and transportation infrastructure would ultimately be a positive for the business and technology ecosystem.
A surprisingly strong majority of respondents, more than 80%, were in favor of MassTLC’s making a statement on the issue of Question 1. With such a split, we felt it was more valuable to share the survey results and some direct quotes from our members, rather than to make a policy statement.
Here are some of the opinions shared by our members about the potential impact of Question 1 on the Technology sector:
Yes, in favor of passing Question 1:
- “Impact will be positive as MA schools and infrastructure will receive more funding. It will also make MA a more inclusive state.”
- “Few technologists are paid over a $1M. In those cases where a liquidation event occurs, 4% is manageable if you are taking in millions.”
- “We need more state funding for the assets we rely on to make the state more competitive—addressing our abysmal transportation sector and improving public education, most notably. While I wish the legislation had carve outs for sales of small businesses (like QSBS at the federal level), imperfect is better than kicking the can down the road again.”
- “As executives, if we are fortunate enough to have reached this level of success, we have a moral and ethical obligation to help those less so – doing so (via taxation) will have a net positive effect on society as a whole. As leaders, that translates to a better educated, more democratic, and ultimately more competitive talent pool.”
- “The additional tax is pretty limited in scope, and the overall impact on someone’s pocketbook is, in my opinion, overblown. If a business/individual is influenced by this tax to set up shop elsewhere, they’re missing the bigger picture of why to locate in MA.”
No, against passing Question 1:
- “If passed, it will signal that MA does not value innovation by driving founders out of state.”
- “We will see technology talent and leadership leave or no longer be interested in moving to MA. This is the same reason many people have not returned to CA post-COVID.”
- “When talking with a state representative, I learned that the allocation of those particular tax dollars for specific initiatives is nearly impossible. I agree we need to have money to improve our schools and infrastructure, but this tax does not seem the right way to do it.”
- “It will reinforce the image of ’Taxachusetts,‘, potentially discouraging companies form locating here.”
- “As a small business owner, we often leave the income we generate to address business needs. Unfortunately, with Q1 it will mean less income and, therefore, less growth.”
There is no shortage of information on this question, and we urge each and every one of our members who is able to vote to do your research, and of course, vote.