“We need to address the trends that are pricing out low- and middle-income residents, and stop incentivizing higher earning residents and businesses to leave,” Doug Howgate, the President of the Massachusetts Taxpayers Foundation said in a statement. “The proposal laid out today would help make Massachusetts less of an outlier compared to its peers and help the Commonwealth retain and grow its population, jobs, and investment. We look forward to working (with) the Administration and legislative leaders to advance tax relief this year.”

“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.

The nonpartisan Massachusetts Taxpayers Foundation said Healey’s plan noticeably fell short of the foundation’s own $1.3 billion tax relief vision.

But the foundation remarked Healey’s proposal is significant and described the package as “a strong start to tax relief discussions this year.”

“It’s a big step in the right direction,” said Doug Howgate, the president of the Massachusetts Taxpayers Foundation, in an interview. “It shows she’s pragmatic and she wants to solve problems.”

Doug Howgate, president of the Massachusetts Taxpayers Foundation, praised the underpinnings of Healey’s tax relief package to “retain families, seniors and employers.”

“The proposal laid out today would help make Massachusetts less of an outlier compared to its peers and help the commonwealth retain and grow its population, jobs, and investment,” Howgate said in a statement.

Today, Governor Healey announced the details of a tax relief proposal that she plans to file in conjunction with her Fiscal Year (FY) 2024 budget proposal on March 1st. The tax package, which has an FY 2024 budget impact of $742 million and an annualized impact of $986.5 million, shares key elements with House and Senate tax bills from 2022 and follows through on the Governor’s campaign promise to more than double the child and dependent tax credit.

But tax reform can’t fall by the wayside again. Massachusetts is indeed a wonderful place to live — for those can afford it. So expanding the existing child and dependent care tax credit would, according to the Taxpayers Foundation, benefit more than 500,000 tax filers caring for more than 1 million children and dependents.

Tax policy is at the forefront of the legislative and fiscal agenda in 2023 as the state implements the income surtax, reassesses a tax package that garnered bipartisan support last year, and welcomes a new gubernatorial administration that has made tax relief a major policy priority.

Chapter 62F of the Massachusetts General Laws establishes a limit on annual state tax revenue collections. The law, passed by an initiative petition in 1986, created a process by which actual tax collections are compared to an allowable tax revenue threshold, adjusted annually on the basis of wage and salary growth in the Commonwealth. If actual collections exceed the allowable threshold, the excess revenue is returned to eligible income tax filers in amounts proportionate to filers’ income taxes paid in the most recent tax year.

The state’s 4 percent surtax on income over $1 million is now in effect.  The new tax raises critical policy questions related to its effect on long-term economic growth and its impact on other areas of the tax code.  At the same time, the surtax creates a number of fiscal and tax policy questions.  This brief: