#36 Massachusetts

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Fiscal policy consists of categories for taxes, government employment, spending, debt, and fiscal decentralization.

From 2012

State Facts

Net Migration Rate (?) -4.8 % 
Personal Income Growth (?) 2.01 %
How does the freedom ranking relate to these?


Massachusetts has long had a better economic policy regime than one would expect given its strongly left-of-center electorate, and one of the best records on personal freedom, particularly criminal justice.

On fiscal policy, the nickname “Taxachusetts” is a bit of a misnomer. Massachusetts’s overall tax burden is about average, although individual income taxes are among the highest in the country. Massachusetts residents have ample choice of local government, more than four every 100 square miles. Government subsidies are extremely high, about two standard deviations above the mean, and have risen over time. Government debt is also high, at about 24.0 percent of personal income, but has fallen 5 percentage points since FY 2009. Government employment is among the lowest in the country, at 10.2 percent of the private workforce.

On the most important category of regulatory policy, land-use regulation, Massachusetts is below average, although our two indicators of zoning stringency give somewhat conflicting judgments. Renewable portfolio standards have grown rather high. Eminent domain for private gain is completely unrestrained. The state has consistently had a higher-than-federal minimum wage, though not one of the highest in the country. Workers’ compensation coverage mandates are extreme, though employers have great freedom of choice in funding them. The state passed a telecom deregulation bill in 2013–14. The extent of occupational licensing is lower than average in Massachusetts, though nurses enjoy little freedom from the state. Personal automobile insurance remains tightly regulated, and the state has a CON law for hospitals, as well as an anti-price-gouging law, licensure of moving companies, and both general and gasoline-focused sales-below-cost laws. The civil liability system is subpar but has improved over time, though not because of any particular statutory or institutional reforms.

Massachusetts has long locked up fewer of its residents than the vast majority of other states. It also arrests fewer people for drugs and other victimless crimes than most other places. Moreover, it scores highly for cannabis freedom, with a comparatively liberal medical marijuana law enacted in 2011–12. However, its asset forfeiture law is tied for worst in the country, putting the burden of proof on innocent owners, giving all the proceeds to law enforcement, and requiring only probable cause for showing the property is subject to forfeiture. The Second Amendment is virtually a dead letter in Massachusetts: the state tries to make guns as expensive as possible (locking mandates, dealer licensing, license to purchase any gun, with safety training) and nearly prohibits carry in public. It is the third-worst state for tobacco freedom, with comprehensive smoking bans and punishingly high cigarette taxes ($3.51 a pack after having been raised again in 2013–14). Educational freedom is low. Homeschooling parents have to jump through many hoops and must meet detailed curriculum guidelines. Private schools are subject to government approval. Massachusetts’s casino plans have not yet fully become operational (with only one open as of the end of 2015), but once they do, expect the state’s gambling freedom score to rise. The state’s alcohol freedom score improved in 2013–14, due to the repeal of the direct wine shipping ban, but wine in grocery stores remains subject to mind-numbingly complex rules undoubtedly designed for some obscure political purpose.

Policy Recommendations

  • Fiscal: Abolish government subsidies to business and cut taxes accordingly. This move would raise Massachusetts from 39th to 23rd on fiscal policy, all else equal.
  • Regulatory: Repeal outdated and cronyist regulations, such as the price-gouging law, the sales-below-cost laws, moving company licensure, and the CON law for hospitals.
  • Personal: Reform civil asset forfeiture to require a criminal conviction before forfeiture, and ban equitable sharing that does not comply with this standard. In 2014, this move would have raised Massachusetts from 11th to 7th on personal freedom, ahead of New Hampshire and Alaska.
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