Gov. Healey releases $750 million tax reform plan

Gov. Maura Healey unveiled a roughly $750 million tax reform plan on Monday aimed at offering "significant savings for families, renters, seniors" and others.

"This proposal centers affordability, competitiveness and equity each step of the way, delivering relief to those who need it most and making reforms that will attract and retain more businesses and residents to our great state," Healey said in a statement.

The Democrat is proposing several changes to the tax code. One of the biggest proposals would increase an annual child and family tax credit from $240 to $600 per any dependent under age 13 or older than 65. Families would also receive the funds for any dependents with disabilities who do not fall under those age ranges.

The family tax credit would cost the state $458 million, according to Healey's office. It would "put money directly back into the pockets of 700,000 taxpayers in connection with more than 1 million dependents, helping families keep up with rising costs for child and senior care and bringing people back into the workforce to meet employer demand," Healey's office said in the statement.

Healey's plan also called for increasing the rental deduction that allows people to write off 50% of rent up to $3,000. The administration would seek to raise that threshold to $4,000. And for low-income seniors with high property taxes or rent, the governor will seek to double an available tax credit to help them stay in their homes.

“Significant tax relief is not only affordable, it is critical. The Healey-Driscoll Administration’s package would ease the cost crunch that’s making it tough for Massachusetts to attract and retain families, seniors, and employers,” said Massachusetts Taxpayers Foundation President Doug Howgate.

Healey also wants to reduce the short-term capital gains tax from 12% to 5%, while also raising the threshold at which the state's estate tax kicks infrom $1 million to $3 million. The statement said the estate tax change would "reduce the tax burden on smaller estates, which historically have filed over 70% of estate tax returns."

James Rooney, president and CEO of the Greater Boston Chamber of Commerce, reacted with praise for the administration's capital gains and estate taxes proposal. But, in a statement Monday, he added "there remains much work to do to restore Massachusetts’ competitiveness to keep residents and businesses here. ... With a state budget that increased by $10 billion — 25% — in just four fiscal years because of private sector wage growth, policymakers must find meaningful ways to continue to support the region's employers as they seek to stay and succeed here."

Healey's office said the tax package would carry a total cost in fiscal year 2024 of $859 million. It said the measure has a net cost of $742 million, because the $117 million in affected short-term capital gains tax revenue by law would need to be placed into reserves and could not be spent as part of the annual budget.

The plan will need legislative approval. Healey is expected to file her tax reform bill Wednesday, alongside her required budget recommendations for the next fiscal year.

With reporting from the State House News Service

This article was originally published on February 27, 2023.


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Lisa Creamer is WBUR's managing editor for digital news.


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Steve Brown is a veteran broadcast journalist who serves as WBUR's senior State House reporter.



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