Healey debuts $750 million tax cut plan
(The Center Square) – Tax relief could be coming to Massachusetts families, seniors, and those seeking affordable housing.
Freshman Democratic Gov. Maura Healey outlined a $750 million tax relief package on Monday, which is expected to be filed Wednesday along with House Bill 1, the fiscal year 2024 budget proposal.
The tax relief plan, according to a release, includes savings for families, renters, seniors, farmers, commuters, and would also highlight key tax reforms to the state’s code to bring Massachusetts on par with other states.
“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,” Healey said in a statement.
The tax relief package, according to the release, would include the governor’s proposed Child and Family Tax Credit. The new benefit would provide families with a $600 per child tax credit, including children under 13, people with disabilities, and seniors aged 65 and over.
Massachusetts’ greatest strength is its families. But the high cost of child and senior care is weighing them down. I’m proposing a $600 Child and Family Tax Credit to put money back in their pockets and help them pay for the basics. pic.twitter.com/3ETbKeoPf6— Maura Healey (@MassGovernor) February 27, 2023
Massachusetts Fiscal Alliance, in a statement provided to The Center Square, applauded the governor’s tax relief plan. The policy group said it mitigates negative effects of the millionaire’s tax hike, which places a 4% income tax on income over $1 million on top of the state’s 5% flat-tax rate.
“Governor Healey has taken a positive first step with this tax package,” Paul D. Craney, a spokesman for the Alliance, said in the statement. “The reform of our estate tax in particular is much needed to remedy our state from its outlier status, and it’s a welcomed surprise that Gov. Healey’s proposal on this tax is even more competitive than her predecessor’s. While many states are eliminating or moving to eliminate their estate taxes, including President Biden’s home state of Delaware, Massachusetts currently has one of the most punitive estate taxes in the country.”
The Alliance said the state will still “need bolder action” to mitigate the ramifications of Question 1’s ratification by voters, including urging the Legislature “to consider a broad-based approach to reducing taxes” and calling for “an examination of a reduction in the state income tax rate” to keep the sate competitive.
The child tax credit plan, according to the release, would cost $458 million to Massachusetts but would benefit 700,000 taxpayers who have more than 1 million dependents.
Another facet of the plan, according to a release, is rental deduction. The incentive, which is capped at 50% for rent up to $3,000, would be increased to $4,000 and benefit 880,000 renters. The senior circuit breaker tax would also be doubled to $2,400 for low-income seniors facing high property taxes or rent, benefiting 100,000 seniors. The tax plan comes at a cost of $40 million.
The plan also features the elimination of the estate tax for estates valued up to $3 million with a tax credit of up to $182,000, according to a release. The tax relief plan would double statewide cap credits to $5 million for apprenticeships; increase the cap to $8 million on the dairy tax credit; and allow for $3,000 deductions for lead paint abatement.
