More money in people’s pockets with state tax relief package. Here’s why.
BOSTON — “It’s official!”
Those were the first words spoken by Gov. Maura Healey as she finished signing a $1 billion comprehensive tax relief package that was two years in the making. Legislators brag the cuts will put real money into real people’s pockets, incentivize housing starts in Gateway Cities and other municipalities while decreasing the state’s capital gains and inheritance taxes.
“People can’t realize their dreams until the nightmare of high costs ends,” Healey said. Her administration has made affordability, competitiveness and equity its watchwords, and Healey said the package takes a giant step forward in promoting all three.
Healey and Lt. Gov. Kimberly Driscoll will be taking the information on the road in coming weeks, meeting with residents across the state to educate everyone about the package details.
“We are going to the people,” Healey said.
It’s a bid to show government responsiveness to those residents who shared the pain of the high cost of living in the Bay State with Healey and her team. The governor is confident the tax cuts, coupled with other affordability measures included in the state budget, most notably the decision to fund universal school meals for all public school students in the state, will ease residents’ financial burdens.
Free meals could save families about $1,200 a year per child eating in a public school. Healey also touted other measures: Tuition-free community college for all residents 25 or older without degrees who return to school and for nursing students, and in-state tuition for migrants who have completed high school or attended high school for three years in Massachusetts.
“We are keeping the wealth here. This will stimulate the economy and attract business,” Healey said.
The package promises relief for low- and moderate-income families in Massachusetts, increasing the child or dependent care tax credits from $180 to $310 per dependent in 2023 and increasing it to $440 in 2024 tax year. The package also eliminates the two-person cap on claims. The earned income tax credit was also increased from 30% of the federal limit to 40%, ensuring more support for 400,000 working individuals and families making less than $60,000 a year.
Massachusetts seniors will get help to stay in their homes, regardless of whether they file income taxes, with the senior circuit breaker doubled from $1,200 to $2,400. Commuters will be able to deduct the cost of using public transportation and renters will be able to deduct more of their rent up from $3,000 to $4,000 a year. There are benefits for homeowners on septic systems, for lead paint abatement and even for dairy farmers and cider makers.
Changes include tweaks to the inheritance tax. Estates up to $2 million would be exempt, with short-term capital gains lowered from 12% to 8.5%.
When asked about Healey’s request for an additional $250 million to shore up the emergency shelter program, House Speaker Ron Mariano said legislators will not act until they have a clear idea of the numbers of migrants who will be entering Massachusetts.
“We’re waiting for a framework. The total cost is still up in the air,” said Mariano. “We’re talking with some Washington (D.C.) folks, and we need answers before we commit to a payment. The number of people coming changes every day.”
Healey said her administration and the Massachusetts delegation to Washington has been asking for two things from the Biden administration: Funding and to expedite work papers for the more than 6,000 migrants currently housed in Massachusetts.
Mariano added that President Joe Biden is “running for president; he should start paying attention to this.”