It's too soon to judge the impact of the 'millionaires tax' in Massachusetts

Welcome back and here comes the holiday weekend!

?? I’m Boston Globe financial columnist Larry Edelman , and today I've got a warning about rushing to judgment on the impact of the Massachusetts? “millionaires tax.”

Plus: A personal Ivan Boesky anecdote.

Trendlines is a twice-weekly newsletter by Boston Globe columnist Larry Edelman. Click the subscribe button to keep on top of business and the economy in the region and beyond.

?? Hold your judgment

The Massachusetts Department of Revenue said Monday that the new 4 percent tax on high earners —?a.k.a. the millionaires tax — brought in $1.84 billion from July through April, the first 10 months of the state’s fiscal year.

• ?If the trend holds, revenue would top $2 billion for the full year, double what Governor Maura Healey and state lawmakers planned to spend.

The reaction

Supporters applauded the numbers as evidence that the levy will provide ample funding for education and transportation initiatives. Meanwhile, opponents said the financial gains would come at the cost of forcing Massachusetts jobs and residents out of state.

Why it matters

Excluding the millionaires tax, the state’s budget is being squeezed. All other tax revenue through April was just $89 million above the state’s forecast, and $263 million below the same period last year.

Step back

The millionaires tax is no less divisive than it was in November 2022, when the constitutional amendment was approved, 52 percent to 48 percent.

Nonpartisan view

The big dollars now flowing into the state’s coffers are only part of the story, said Evan Horowitz , executive director of the Center for State Policy Analysis at Tufts University.

• What we can’t see in the revenue data is how much money is being lost due to residents moving out of state or taking more aggressive tax avoidance measures. Horowitz has estimated those hits to income tax receipts at $500 million.

Final thought

“It will always be hard to judge” the net impact of the millionaires tax, Horowitz told me. ”Give it a couple of years and do a trend analysis [of state revenues]. Then we will have a better sense.”

?? Trending

Higher education: Harvard’s governing board said 13 pro-Palestinian students who participated in a three-week encampment won't receive their degrees at graduation.

Media: GBH laid off 31 employees and canceled three TV shows. And its general manager for news said she was stepping down.

Politics & Policy: Boston’s broken liquor license system is driving chefs from the city.

???? The closer

Ivan Boesky, the stock trader who inspired the character Gordon Gekko in Oliver Stone’s movie “Wall Street,” died this week. He was 87.

I covered Boesky’s sentencing as a young reporter for Reuters in 1987, sitting in the packed courtroom in New York while a clerk occupied a payphone booth in the hall to keep the line to the newsroom open.?

When the sentence came down — three years, of which he served 18 months — I ran out and yelled the news to the clerk, who relayed it to an editor on the other end of the phone, who filed headlines that rang bells on Reuters ticker machines around the world.

Misty watercolor memories. . .? Programming note: Trendlines is off for Memorial Day. Have a safe holiday. See you next Thursday. The trend ?? is your friend.

If you’d like to read my expanded business newsletter via email, sign up at globe.com/trendlines.