Gov. Charlie Baker assembled a broad swath of representatives from the Bay State’s business community on Tax Day to advocate for his tax plan, which would include broad cuts for low-income families, renters, seniors and others.
“With residents and families continuing to face rising costs, Massachusetts should take action and pass tax cuts that will reduce costs and give taxpayers a break,” Baker said. “Revenues continue to exceed expectations, so it’s time to give some of this surplus revenue back to taxpayers.”
Massachusetts has seen historically high revenue levels, in part thanks to an influx of federal dollars from the American Rescue Plan. Last fiscal year, the state ended with a $5 billion surplus. Already, state revenues beat projections by $856 million in January, $293 million in February and $427 million in March.
Baker invited guest speakers including Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, Amy Pitter, president and CEO of MassCPAs, Jon Hurst of the Retailers Association of Massachusetts, John Regan of Associated Industries of Massachusetts and Carolyn Ryan of the Greater Boston Chamber of Commerce, to advocate for his plan.
Last week, the House Ways and Means Committee unveiled a nearly $50 billion spending package for the next fiscal year, which did not include the nearly $700 million in proposed tax cuts Baker proposed.
“We can afford to give money back to the taxpayers,” Baker said in response to a question about the House’s omission. “We claim to be one of the most progressive states in the country in terms of what we do (for) low-income wage earners… We should step up and do the right thing on behalf of those folks.”
“The loss of workforce that Massachusetts has been experiencing throughout the pandemic makes having a proactive strategy to retain and attract talent critical to our future economic vitality. The governor’s tax package represents an important initial step,” McAnneny of MTF said.
“Other states are advertising on billboards, and they’re targeting Massachusetts with proactive attraction strategies for both talent and businesses,” Ryan of the Greater Boston Chamber of Commerce added. “After decades of knowing that the region’s workforce quality and business ecosystems were enough to attract and keep businesses and jobs here, it’s time to shift our thinking.”
Baker’s bill would raise the estate tax threshold from $1 million to $2 million, cut the tax rate in half for short-term capital gains, raise the income threshold for low-income residents to be exempt from income taxes, and include other benefits for seniors, renters and those who care for dependents.
Baker also dug into the state’s estate tax, one of only two in the country that kicks in at $1 million.
“There’s a big coalition of Democrats and Republicans who support doing something about the estate tax because they have watched many of their residents leave, and move and take with them their income, their philanthropy and everything else,” he said. “This is an extraordinary opportunity to do something for a bunch of people who deserve the relief.”