According to the news released by the Eagle-Tribune last Thursday, June 8, a tax relief plan is rolled out that will benefit a tax credit for housing child care, renters, and senior citizens, and overhauling of the estate tax.
What are the benefits of the Tax Relief Proposal?
The $590 million proposal consists of permanent tax changes in the Senate Democrats that aim to help the state attract new businesses and residents and help people that are struggling due to the high inflation rate.
The proposal of Governor Maura Healey was a sustainable, progressive, smart, and permanent tax reform proposal that will greatly benefit the state’s economy and will increase the state’s competitiveness. She points out that the main goal of the proposed tax relief program is to maintain economic competitiveness by making the rents affordable to low-income families and at the same time they have the freedom to live comfortably where they want to work and build their families, according to the statement of Karen Spilka, D-Ashland – Senate President.
The Senate tax proposal would increase the rental deduction, from $3000 to $4000. There will be an increase of $20 million in the State’s Low Income Housing Tax Credit. It will also maximize the senior credit by doubling $1,200 to $2,400, which will cost the state about $60 million. This is for the senior citizens with high property tax and rents but low income.
The proposal also likes to address the child and dependent tax credit from $180 to $310 per dependent and increase the number of eligible dependents and children, which would cost about $164 million as to the Senate Democrats.
The anti-poverty program of the state will be increased up to 40% of the federal credit, which would cost the state $85 million.
The tax cut, will they be approved?
The Senate rejects the proposal of decreasing the short-term capital gains tax to 5% from 12%. House and liberal groups and Progressive Democrats controvert the proposal of cutting the business tax that would hugely benefit the wealthiest residents of the states. The group RaiseUp Massachusetts they have already studied the allocation for the tax cuts depending on the economic classification, making sure that big corporations and high-class families have also the right amount of tax cuts.
However, House leaders and Healey emphasized that tax cuts it recommended to improve the census data of the state and to address the loss of hundreds and thousands of residents in recent years.
Dough Howgate, president of the Massachusetts Tax Payer Foundation, and Paul Craney conservative pro-business group Massachusetts Fiscal Alliance appreciate the proposals’ commitment to a meaningful reform. However, it objects to the implementation of tax cuts that will decrease the state’s competitiveness.