The Enterprise Value Tax: What It Means for the Massachusetts Economy

President Obama’s Plan for Economic Growth and Deficit Reduction contains a provision called the “Enterprise Value Tax” (EVT) which would force certain partnerships to pay ordinary income tax on the sale of any part of their business. Massachusetts will pay $611 million annually in new federal taxes under the plan. The state will also lose 5,400 jobs, annual capital spending will fall by $9.5 million, and resident’s real disposable income, or income available for spending and saving, will fall by $673.2 million. The tax discourages innovation and, with it, technical progress, with further negative effects on investment, productivity, employment, and income.

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