Gov’s plan to cut death tax, capital gains meets backlash
‘Incredibly regressive’ proposal slammed by progressive group
The governor’s long awaited and oft promised tax relief plan has arrived, totaling more than threequarters of a billion dollars in cuts, but is already encountering stiff resistance.
“We are deeply concerned that proposed changes to the estate tax and shortterm capital gains tax rate would deliver an enormous windfall to the richest members of our society, while depriving the state of hundreds of millions of dollars in much-needed revenues,” The Raise Up Massachusetts coalition, the group responsible for passing the state’s Fair Share Amendment, said in a statement.
According to the group, proposed cuts to the estate and capital gains taxes offered by the governor Monday stand in direct opposition to the will of the voters as demonstrated in November, when they passed a 4% tax on incomes over $1 million.
“A billion-dollar permanent tax cut, including these two incredibly regressive policies, would undermine those goals while placing the state at risk for catastrophic budget cuts in future years,” they said.
Due to be filed Wednesday along with her first budget as the state’s chief executive, Gov. Maura Healey’s tax cut plan totals $742 million in cost with over $100 million in additional revenue neutral cuts.
The plan would eliminate the estate tax for assets totaling less than $3 million by providing an up to $182,000 tax credit, something long sought by tax reform proponents in order to make the state more livable for retirees.
“This reform would reduce the tax burden on smaller estates, which historically have filed over 70 percent of estate tax returns, and helps seniors and families age in place and be able to stay in Massachusetts” Healey’s team said with the release of the proposal.
The proposal also seeks to reduce the short-term capital gains tax from 12% to 5%, at an expected revenue cost of $117 million, “but would be budget-neutral due to excess capital gains not being used to support FY24 spending,” Healey’s office said.
Most of the cost of the plan would see $458 million cut from state revenues by combining the Household Dependent Tax Credit and the Dependent Care Tax Credit to provide a $600 tax credit per dependent with no cap on the number of dependents.
It would spend another $40 million to up the rental deduction from $3,000 to $4,000 and double the socalled senior circuit breaker credit from $1,200 to $2,400, benefiting 880,000 renters and over 100,000 older residents.
According to Healey, the plan attempts to strike a balance.
“This proposal centers affordability, competitiveness and equity each step of the way, delivering relief to those who need it most and making reforms that will attract and retain more businesses and residents to our great state,” she said in a statement.
Jim Rooney, the President of the Greater Boston Chamber of Commerce, reacted with mixed feelings to the proposal.
“There is much to support in this tax package, and it certainly represents a good first signal that the administration will work with the business community, especially with the inclusion of capital gains and estate taxes,” he said. “However, there remains much work to do to restore Massachusetts’ competitiveness to keep residents and businesses here, and we look forward to working with the legislature on this tax package and the budget in the coming months”
26th Middlesex State Rep. Mike Connolly, took to social media to suggest the plan be paid for by the state’s corporate citizens.
“Today, the Governor released her $859 million tax cut plan. At first glance, there are several worthy elements, but what’s missing is a way to cover the lost revenue. I support making corporations pay their fair share in taxes. In this way, we can make tax relief revenue-neutral,” he tweeted.
The nonpartisan Massachusetts Taxpayers Foundation welcomed Healey’s plan.
“The proposal laid out today would help make Massachusetts less of an outlier compared to its peers and help the Commonwealth retain and grow its population, jobs, and investment. We look forward to working (with) the Administration and legislative leaders to advance tax relief this year,” Doug Howgate, the foundation’s president, said in a statement.