Conservative fiscal group calls for broad base tax cuts in 2024 after ‘minor’ reforms
A conservative fiscal group called Thursday for broad base tax cuts in 2024, arguing a “very minor” tax package Beacon Hill lawmakers passed earlier this year is not enough to keep Massachusetts competitive with the rest of the country.
Massachusetts Fiscal Alliance spokesman Paul Craney and local officials also slammed a voter-approved 4% surtax on incomes over $1 million — revenue of which has been allocated to education and transportation needs in the state — as a reason why residents are leaving Massachusetts.
“Even though the Legislature and the governor passed very minor tax relief, if the goal was to keep people here, stop people from leaving, or even attract people to Massachusetts, what they passed … is not going to do it,” Craney said. “There has to be more.”
Gov. Maura Healey signed a $1 billion-a-year tax relief bill in October after the Legislature debated some form of the package for nearly two years.
The law lowers the short-term capital gains tax from 12% to 8.5%, boosts the rental deduction cap, and reworks the distribution formula for a tax cap law that has in the past generated refunds for residents, among other things.
Healey said the package was the first major tax cut in over 20 years and would save money for residents all across the state as higher costs were putting pressure on them.
“The most direct thing that government can do is to show that we get it, to show that we get it and how do you show that you get it? By actually putting money back in people’s pockets, to take some of that pain away, to cut taxes, and to deliver. And that’s why we can say today, Massachusetts tax cuts are here and everyone is going to benefit from them,” Healey said at a bill signing event.
Senate President Karen Spilka, an Ashland Democrat, called the tax relief bill “historic.”
“This tax relief bill will help alleviate many, many financial burdens that our families, our seniors, our renters face and put real dollars in their pockets,” she said in September. “For example, a low-income household with two kids will see their tax refund check increase by more than $1,000 because of this bill. This is real money that our families need the most.”
Craney pointed to a Nov. 22, 2022 blog post from the national Tax Foundation when asked what specific tax cuts the Massachusetts Fiscal Alliance would like to see lawmakers consider. The Tax Foundation argued policymakers should look at reforms to the property tax system and corporate income tax system.
Massachusetts’ main competition is New Hampshire and Florida, Craney said, states that do not have taxes like the inventory tax.
“We can’t think of our tax code based off of how Connecticut feels, or New York or New Jersey, like these obscure states around. It’s who are we actually competing with? And it’s, again, New Hampshire, number one, number two is Florida. We have to mimic what they’re doing,” Craney said.