MASSterList reports on the estate tax relief discussions happening in the Massachusetts legislature amid recent reports of state tax revenue dropping last month:
Will the eye-popping drop in April revenue numbers, which came in $1.4 billion under benchmark make them blink? The Senate, perhaps a little more to the left than the House, will have to consider the capital gains and estate tax rate cuts approved by the House last month, along with increases in the dependent and child tax credit.
An interesting factoid about capital gains tax cuts: The Urban-Brookings Tax Policy Center estimates that in 2019, more than 75 percent of the tax benefit for the lower rates went to taxpayers with income over $1 million. Those are the same residents Massachusetts has tagged with a new tax on income over $1 million, which rolled out this year.
Raise Up Massachusetts, the group behind the millionaire tax, said relief “should focus on making sustainable investments in affordability for working families.”
Doug Howgate, president of the centrist Massachusetts Taxpayers Foundation, said lawmakers should stick with the current “well-rounded” relief package, including handouts for wealthier earners, which he said are still viable. He’s called capital gains and estate taxes outliers that cut the state’s competitiveness.
On the estate tax: Evan Horowitz at Tufts’ Center for State Policy Analysis told MASSterList that the “badly designed tax” is due for some updating.
Currently, 11 states including Massachusetts tax levy taxes on the value of a decedent’s assets after debts have been paid. The Bay State shares the title of having the lowest threshold with Oregon.
This post is a part of Old Colony Law’s Estate Tax Updates.