“Sometimes tax cuts that benefit wealthy people also are important for competitiveness. Sometimes they’re not — they’re just tax cuts that benefit wealthy people,” he said.
"It has a long term cost of roughly nearly a billion dollars a year. That's a pretty significant permanent tax change to the tax system," said Evan Horowitz, executive director at the Center for State Policy Analysis at Tufts University. "
Efforts to avoid the tax could mean a cut in the expected revenue by $800 million. “Together, cross-border moves and tax avoidance would reduce millionaires tax revenue by roughly 35 percent,” the center said.
A report by the Tufts University’s Center for State Policy Analysis estimated the state will collect about $1.3 billion in 2023 from the roughly 26,000 wealthy households that will likely be subject to the surtax.
But, Tufts researchers cautioned, the new law could lead to “widespread” tax avoidance that would seriously cut into the amount of revenue raised by the state.
“It’s probably best to think of this as the beginning of a long, cat-and-mouse game of tax avoidance that high earners will be playing against the state for decades to come,” warned Horowitz.
“According to our projections, it would take another set of inopportune events for the state to hit the 62F limit again in the coming years,” Horowitz said.
Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, views the situation differently. He says put the money where it’s needed, and don’t stick to rigid formulas.