US multinational General Electric (GE) announced its decision in January to move its headquarters from Fairfield, Connecticut to Boston, Massachusetts, spotlighting the importance of human talent and attractive tax policies in attracting investment. The industrial giant’s move marks the biggest relocation of any company into the city.
GE cited Boston’s concentration of a highly skilled workforce, elite universities and tech institutions as its main draw. The state of Massachusetts’ tax environment also played a key role in the company’s decision. Boston city officials have said they will offer GE up to $25m in property tax relief, part of an incentive deal valued at up to $145m.
In 2015, Connecticut’s state legislature implemented several corporate income tax increases to meet its state budget requirement of $500m in corporate tax revenue. These measures would have subjected GE’s profits to Connecticut’s 9% income tax rate, one of the highest in the country. Massachusetts’ tax climate, ranked 25th in the US by the State Business Tax Climate Index, proves much more attractive to multinationals than Connecticut’s, ranked 44th.