The growing appeal of the ‘Live Free or Die’ state
By Jeff Jacoby, Boston Globe

At the stroke of midnight on Jan. 1, New Hampshire stopped taxing interest and dividends. At that moment, the Granite State — which has never imposed a tax on wages — became a true no-income-tax state, one of only eight in America.

That means that one of the best things about living in Massachusetts — its proximity to New Hampshire — is now even better.

New Hampshire is not the lowest-taxing state in the union, but it has by far the lightest tax burden in the Northeast. It also boasts a more favorable return on investment than any other state. As Andrew Cline of the Josiah Bartlett Center for Public Policy in Concord, N.H., recently wrote, “We get very high quality services at a relatively low cost.”

Is it any wonder that so many Massachusetts residents yearn to live in New Hampshire? “In the Granite State, ordinary citizens are entrusted with considerable authority and government is restricted,” I wrote in a 2023 column. “In the Bay State, by contrast, residents are allowed only what the state permits — and woe to those who buck the system.” Moreover, New Hampshire is safer than Massachusetts, it imposes fewer regulatory burdens, and it has two competitive political parties. All that, and lower taxes too.

For years, Massachusetts has been forfeiting more residents to other states than it attracts from other states. As far back as December 2003, a study co-produced by MassINC and the University of Massachusetts warned: “Massachusetts has been losing in the competition for people. … [T]he rate of loss has been accelerating over the last five years.” Two decades later, the picture is no prettier, especially with regard to New Hampshire. Between 2018 and 2022, according to the Census Bureau, 22,047 Massachusetts residents moved to New Hampshire — significantly more than the 19,189 who moved to Florida, the 18,933 who went to New York, or the 14,818 who relocated to California. By now, so many Bay Staters have pulled up stakes and headed north that former Massachusetts residents account for more than 25 percent of New Hampshire’s population. In 2021 and 2022, notes demographer Kenneth Johnson, nearly 44 percent of migrants to New Hampshire came from Massachusetts.

People move for all kinds of reasons, of course, but it would be hard to deny that what prompts so many to abandon Massachusetts and make a new start in New Hampshire is its lower cost of living and its much lighter tax burden. “With no income or sales tax, New Hampshire’s tax burden is a fraction of what it is in Massachusetts,” the Boston-based Pioneer Institute noted in July 2022. The contrast between the two states’ approach to taxes grew even sharper later that year, when Massachusetts voters unwisely approved a steep annual income surtax on earnings above $1 million, which raised the top marginal tax rate in the state to 9 percent.

Now New Hampshire has upped the ante. It has scrapped its last vestige of taxation on investment income and given tax-weary Massachusetts residents even more reason to flee. As the Bay State gradually reassumes its former “Taxachusetts” character, New Hampshire offers a very different environment. Are you thinking of leaving the former for the latter? If so, you have plenty of company.