Celtics owner Pagliuca is no ‘millionaires tax’ fan. But that's not why he moved, he says.

The Boston Celtics officially traded forward Grant Williams to the Dallas Mavericks on Wednesday, shortly after he made waves by saying he took the Massachusetts’ “millionaires tax” into account when deciding whether he wanted to stay with the team.

As it happens, Williams’ now-former boss, Celtics co-owner Steve Pagliuca, marked his own farewell moment to Massachusetts this week: He sold his long-time home in Weston for $8.8 million, just under the asking price, according to a deed recorded Wednesday.

After Pagliuca put his mansion on the market last month, it sparked a rumor in business circles that he was moving in order to avoid paying the millionaires tax. I looked up his voter registration and discovered he had indeed changed his enrollment to the address of his Florida residence in January, shortly after the tax took effect. The Massachusetts Department of Revenue lists a change in voter registration as one of the things a person can do to establish they have moved permanently from the state and thus, are not subject to the millionaires tax.

So I called Pagliuca to ask him directly. He told me on Wednesday that no, he didn’t move out of state because of the new 4% surtax on income over $1 million.

However, he had a lot of thoughts about what that tax — also known as the Fair Share Amendment and passed by 52% of voters last fall — will mean for Massachusetts.

Becoming ‘Taxachusetts’ again?

Pagliuca and his wife, Judy, effectively moved to their existing North Palm Beach property three years ago with the arrival of Covid-19, he said. They now spend most of their time there while summering in Narragansett, Rhode Island, he added. At this point, Pagliuca mainly comes to Massachusetts only for Celtics games, he told me. He runs a family investment office out of Florida.

Yes, the millionaires tax went into effect this January, the month Pagliuca changed his voter registration. But January was also the month that the 68-year-old retired from Bain Capital.

“Now that I’m not coming back and working there, I’m really not living there,” said the man who owns Boston’s most decorated pro sports team and once led the city’s 2024 Olympics bid.

OK, I asked, but if you didn’t move because of the millionaires tax, are you worried that it will affect the Celtics’ on-court success? Might other players follow Grant Williams’ train of thought and look for gainful employment elsewhere?

He acknowledged the tax could have some effect on the team: “Generally, punitive tax measures will make it more attractive for high earners, whether basketball players or not, to go to … lower-tax states,” he replied. 

His concern, he said, is more about Massachusetts’ business climate. It’s not so much about losing those with established roots in the Bay State, many of whom he believes will stay, he said. But the tax will keep away entrepreneurs who may have started businesses in Massachusetts but now will look elsewhere, according to Pagliuca.

“If we become ‘Taxachusetts’ again… the main effect will be not about a basketball player, it will be about business formation,” Pagliuca said. “It’s going to make it tougher to attract businesses in Massachusetts.”

A ‘significant impact’ on relocations

There’s nothing new about a wealthy executive who stands in opposition to the millionaires tax. But Pagliuca cuts a different figure than most. He ran for a Massachusetts U.S. Senate seat in 2009 as a Democrat, and remains a Democrat today, registering in the party in Florida this year. The millionaires tax became law in Massachusetts on the back of Democratic support.

In the past, he said, he saw threats that business leaders would leave Massachusetts in response to a tax change as “kind of an empty threat.” But the rise of hybrid work has changed things, he said.

“I never really paid attention to taxes because I worked and lived in Boston for a long time, but now I think you’re seeing, with the technology and the mobility, and then the magnitude of the (tax) increases in New York, Massachusetts and California, that it will have a significant impact in terms of relocations,” Pagliuca said.

Places like Austin, Raleigh and Miami are successfully attracting tech talent, he said. There’s a risk that the millionaires tax will lose revenue for the state, rather than increase it, he added.

Part of the reason that murmurs started about Pagliuca’s move, I believe, is the vacuum around the real-world effects of the tax in its earliest days. Proponents and opponents have traded statistics about taxpayer migration for years and continue to do so. But there have been few, if any, business leaders who have stated publicly they are ditching Massachusetts because of the tax. That also may be why critics of the measure latched onto the opinion shared by Grant Williams, a backup player whose musings on tax policy would otherwise likely not gain much notice.

Pagliuca is not that business leader, based on our conversation.

The winters have been fantastic,” he said.

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