Healey proposes big tax breaks across the board
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Gov. Maura Healey wants to reduce taxes even more than her Republican predecessor intended to just over a year ago.
Driving the news: Healey yesterday announced as part of her first budget proposal a $742 million tax relief plan meant to ease the burden on working people, families and the elderly.
- Democratic legislative leaders signaled tacit approval of the outline, if not the specifics, of the plan after meeting with Healey later in the day.
Healey's big break for families and lower-income workers is a $600 tax credit per dependent, which includes children under 13, seniors and people with disabilities.
- The tax break would reach 700,000 workers and cover over 1 million dependents.
- Healey said the tax credit will help families keep up with the rising costs of senior health care and child care, while allowing more caregivers back into the workforce.
Details: The plan would raise the 50% cap on the rental deduction from $3,000 to $4,000. Nearly 900,000 renters in the commonwealth would be able to deduct more from their state taxes to pay for housing costs.
- It would also double the tax credit for low-income seniors.
The budget aims to make Mass. more affordable to employers and wealthier residents that pay most of the state's tax revenue.
- The short-term capital gains tax would be slashed from 12% to 5% to bring the rate in line with the longer-term capital gains tax.
- Healey would triple the value an estate must reach before being subject to additional taxes imposed at the owner's death.
Conservatives and business groups like Associated Industries of Mass. applauded the breaks.
The other side: A few vocal progressives on Beacon Hill questioned if the good outweighs the bad in Healey's plan.
- "That's $400 million a year that we could have to expand early education, invest in public transit and things that voters have asked for," MassBudget president Marie-Frances Rivera told Axios.
- "At first glance, there are several worthy elements, but what's missing is a way to cover the lost revenue," progressive Cambridge Rep. Mike Connolly tweeted yesterday morning.
- Breaks to the estate and capital gains taxes "would deliver an enormous windfall to the richest members of our society," wrote Andrew Farnitano of the pro-tax Raise Up Coalition in a statement.
Flashback: Former Gov. Charlie Baker's plan for $693 million in similar tax breaks last year angered liberals and was embraced by moderates. It was ultimately abandoned when automatic tax rebates were distributed after the state took in too much in revenue.
What's next: Healey's proposal needs to win support from the left-leaning Democrats that control the Senate and the more moderate Dems who run the House.
- Both chambers will tweak, rewrite or altogether reject the governor's ideas before they pass their own plan.
- Liberal Democrats will face off against their fiscally moderate colleagues when lawmakers debate the budget this summer.