A budget not only shows how much the state spends to support education, human services, transportation, health care and other programs but it is also includes the sources of revenue the state uses to pay for these programs. The revenue that the state budget relies on comes from a variety of sources including the income tax, the sales tax, the corporate income tax, other miscellaneous taxes and fees, and revenue provided by the federal government.
This page provides the following information about state revenue:
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A pie chart showing a breakdown of Massachusetts tax collections for FY 2009.
A bar chart showing the change in the amount of revenue MA raised for each major tax, as a share of personal income from 1998 to 2008.
A bar chart showing the percent of total personal income paid in state taxes between 1988 and 2009.
A bar chart showing how much people at different income levels pay in state and local taxes.
A chart showing how Massachusetts compares with the rest of the country in the amount of revenue each state collects as a share of personal income.
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If you are interested in more information on state revenues you can get a copy of our most recent Tax Primer or read a series of fact sheets we have prepared on state revenues.
The state’s income tax is the largest source of state revenue, accounting for just under 60 percent in FY 2009, followed by the sales, corporate, motor fuel and cigarettes taxes. Other taxes include taxes on estates, insurance and banking.
The percent of total personal income devoted to state taxes (including an estimate of personal income associated with capital gains) devoted to state taxes has declined since 1998. For more information about the role that spending and revenue decisions have played in the current fiscal crisis, please see the MassBudget brief, “Substantial Surpluses to Dangerous Deficits: A Look at State Fiscal Policies from 1998 to 2008.”
State residents with the highest personal incomes devote the smallest share of that income to taxes. Massachusetts residents may deduct their state income tax and local property taxes on their federal income tax. This federal tax deduction is particularly valuable to higher income taxpayers who are in higher federal brackets.
State and local taxes in Massachusetts amount to 10.5 percent of personal income, below the national average of 11.3 percent.