MassFiscal comments on release of Gov. Healey’s tax package

  The Massachusetts Fiscal Alliance (MassFiscal) applauded Governor Maura Healey for taking an incremental step towards positive tax reforms to help Massachusetts remain economically competitive and mitigate some of the negative effects of the recently passed Question 1 income tax hike.

  While a candidate for Governor, Healey repeatedly promised to cut taxes as her way to help voters deal with inflation and the high cost of living and doing business in Massachusetts. The November election saw the narrow passage of Question 1 implemented into law, which increased the state income tax rate by 80 percent on some small businesses, home sales, retirees and high-income earners. The Commonwealth’s economic competitiveness rankings have already begun to decline due to Question 1’s passage, and tax collections were 5 percent lower last month than in January of last year. According to recent reports, Massachusetts has lost over 100,000 residents since the beginning of the COVID-19 pandemic. Those reports also show that the taxpayer-friendly states of New Hampshire and Florida were the top destinations for Massachusetts residents to escape to.

  “Governor Healey has taken a positive first step with this tax package. 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 Governor 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. This certainly contributes to the outflow of taxpayers from our state to more tax friendly states like New Hampshire and Florida,” noted MassFiscal Spokesperson/Board Member Paul Diego Craney.

  “Reforming the estate tax, as well as her proposed reform of the short-term capital gains tax, in which we are also an outlier, are both helpful moves. Ultimately, Massachusetts will still need bolder action if we’re to mitigate some of the damage done by the passage of Question 1. There are 32 other states in this country without any form of estate or inheritance tax and we should be following their lead in order to keep taxpayers in Massachusetts. We also continue to implore the Governor and Legislature to consider a broad-based approach to reducing taxes and specifically call for an examination of a reduction in the state income tax rate as the single best way to keep Massachusetts competitive,” said Craney.