Governor Charlie Baker filed legislation saving Massachusetts taxpayers roughly $700 million.
As part of his FY2023 budget plan, Governor Charlie Baker filed legislation saving Massachusetts taxpayers roughly $700 million. The proposal calls for lowering state taxes in several different ways, including:
- Matching who is subject to the state income tax to the federal threshold.
- $8,000 to $12,400 for single filers
- 16,400 to $24,800 for joint filers
- $14,400 to $18,650 for heads of household
- Doubling the senior circuit breaker property tax credit from $1,170 to $2,340.
- Raising the tax deduction cap for renters from $3,000 to $5,000
- Doubling the dependent care tax credit.
- $480 for single filers with one eligible dependent
- $960 for single filers with two or more dependents.
- $360 for household filers with one qualifying dependent
- $720 for households with two or more dependents
- Doubling the estate tax exemption from $1 million to $2 million and eliminating the cliff effect (by making the tax only applicable to amounts over $2 million).
- Reducing the state’s short-term capital gains tax from 12% to 5%.
NFIB submitted testimony in favor of Governor Baker’s plan to increase the estate tax exemption and eliminate the fiscal cliff. Estate tax reform is long overdue, as Massachusetts is one of only 16 states with an estate tax and tied for lowest exemption in the nation with Oregon at $1 million.
Some lawmakers already pushed back against cutting state taxes at a recent Joint Committee on Revenue hearing. Opponents claimed reducing estate and capital gains taxes only benefits “the wealthy” and, despite billions of dollars in federal aid and billions of dollars in excess state tax revenue pouring into state coffers, Massachusetts cannot afford tax cuts.