April 11, 2023

As House weighs tax package, ‘millionaires tax’ could be a sticking point

Seamus Webster ,

Boston Business Journal

Doug Howgate, president of the Massachusetts Taxpayers Foundation, said consideration of Healey’s tax proposal needed to account for more than the surtax alone. Between fiscal 2015 and 2022, Massachusetts tax revenue increased more than 60%, from $24.7 billion to $41.1 billion, which Howgate said well outpaced a “normal” revenue growth rate.

“You might want to argue that this tax relief is going to come out of the surtax,” he said. “Well, I would argue that the tax relief is made necessary by the fact that we're about $6 billion ahead of where we would have normally expected our tax collections to be . . . so it just kind of depends on the context.”

Massachusetts is one of only 12 states with an estate tax, and it is one of only two states that tax estates valued as low as $1 million. It also has one of the highest short-term capital gains tax rates in the country.

“Our estate tax has been an outlier for years,” Howgate said. “The short-term capital gains rate has been an outlier for years. Now that we have the surtax in place, do these things make more sense or do they make less sense? And I think the answer is less sense. But that doesn't imply they made sense before.”