Estate Tax News – Our View: Clock ticking for tax relief in Massachusetts

The Sun Chronicle weighs in with some commentary on the long overdue tax relief package. We could not have said it better ourselves!

The clock is ticking.

On Nov. 16, the Massachusetts Legislature is scheduled to end its session. Any bill not approved by then will have to start all over next year.

That includes a bill vitally important for many Bay Staters: tax relief.

In January 2022, then-Gov. Charlie Baker, a Republican, stood before the Legislature and outlined his proposal for tax relief, a plan that was warmly greeted by the Democratic majority.

But for nearly two years now, lawmakers have failed to pull the trigger. Relatively minor differences and foot dragging prevented tax relief from being approved a year ago, and now the Legislature has less than two months to get the job done in 2023.

To fail again would be a cruel slap in the face to taxpayers.

The money is there. Legislators set aside $581 million, less than the $700 million Baker proposed but still enough to provide meaningful relief.

There is money to help tenants faced with skyrocketing rents. There is money to help parents struggling to pay daycare expenses. And there is money to allow businesses to stay and expand in Massachusetts.

Sorry, our lawmakers said. We have other things to do, money to be spent in other places.

And so these taxpayer priorities have been put on the back burner for nearly two years.

As we have said before, a must-do for the Legislature is fixing the estate tax.

Right now, Massachusetts — one of only 12 states that taxes estates — has a 15 percent levy on estates of $1 million or more. Only one other state starts that low, Connecticut.

Massachusetts is the only state that taxes at the first dollar, not at everything over the threshold. It’s the most punitive estate tax in the country.

This could affect thousands of families here in the Attleboro area. Skyrocketing real estate prices have bumped the value of even modest suburban homes to $500,000 or more.

And in recent years, the stock market has been very good to most 401k plans. Working-class families in Attleboro can easily pass on an estate of over $1 million, meaning their heirs might have to cut a six-figure check to the Commonwealth of Massachusetts.

Yet, our lawmakers have dawdled, leaving families wanting to spend their final years here fearing their modest estates will be eaten away by taxes.

The main hangup for the tax relief package appears to be over a proposed cut in the short-term capital gains tax, a reform backed by the House and Gov. Maura Healey. Business leaders say the move would help make Massachusetts more competitive in a time when people and companies are said to be leaving the state. The Senate opposes the cut, calling it handouts to the rich.

Since Democrats hold a supermajority in the Legislature and have a fellow progressive in the corner office of the Statehouse, there should be absolutely no excuse why a compromise can’t be reached, and quickly.

The clock is ticking, and all eyes are on Beacon Hill.

This post is a part of Old Colony Law’s Estate Tax Updates.