It’s not very often the Massachusetts legislature has the opportunity to offer amendments, debate, and get recorded votes on important tax policies, but with an appetite by legislative leaders to pass cuts, this opportunity is happening this week.
A vote is scheduled for Thursday on Speaker Ron Mariano’s tax reform package totaling $1.1B and House Members had a very short window of just hours to offer amendments. This tax reform package would:
- Increase the cap on rental deduction from $3,000 to $4,000
- Decrease the short-term capital gains tax from 12% to 8% for one year, then to 5% starting in 2024
- Increase the state Earned Income Tax Credit from 30% of the federal tax credit to 40% of the federal tax credit
- Increase the maximum available property tax credit for seniors from $750 a year to $1500 a year
- Expand refundable tax credits for child and dependent care by combining the two credits and increasing the credit to $455 per dependent for 2024 and $600 starting in 2025; also eliminating the cap of two dependents per household and by indexing the credit to inflation.
- For affected businesses, eliminates the three-factor apportionment based on location, payroll, and receipts, and replacing it with a single sales apportionment
- Changes the Estate Tax from a $1M trigger to $2M and removes the cliff effect
- Allows a higher % of budgeted revenues to remain in the Stabilization Fund at the end of the fiscal year
A similar tax cut package was passed by each branch last summer when the knowledge of record over collections in tax dollars was widely circulated, however, it was left to die in the reconciliation process once legislative leaders learned that the 62F taxpayer rebate law would be triggered for the first time in 30 years.
Of the 26 amendments offered to this tax reform package, only four came from House Republicans. We acknowledge that this bill takes some steps in the right direction, but unfortunately, they are only baby steps in the grand scheme of things, and it also sets some bad policy. The only meaningful amendment offered by House Republicans was from Minority Leader Brad Jones, (Amendment #2) which would strike a section of the tax bill that aims to gut the voter approved tax cap and rebate law known as 62F.
With the opportunity to present meaningful tax cuts that will make Massachusetts more competitive, the lack of activity from the minority caucus leaves us feeling disappointed. The minority caucus should be articulating conservative positions and pushing for better, conservative, and free market policies whenever the opportunity arises, which doesn’t happen enough.
House Republican Minority Leader, Jones (R-Reading), and his leadership team of State Representatives: Kim Ferguson (R-Holden), Paul Frost (R-Auburn), Jay Barrows (R-Foxboro), and Susan Gifford (R-Wareham) did NOT offer any amendments to:
1. Eliminate the estate tax to put us on an even playing field with top competitors - New Hampshire and Florida (and the majority of states).
2. Eliminate the capital gains tax.
3. Eliminate the inventory tax.
4. Lower the income tax.
5. Eliminate the sting tax.
6. Count the millionaire’s tax collections toward the 62F rebate for taxpayers which this bill excludes.
State Representative Mike Connolly is a socialist from Somerville and he proposed more amendments to the Speaker's tax package than the entire House Republican caucus combined. If you would like to read the amendments yourself, please click here.
This begs the question, if House Republican leadership is uninterested in tax policy, what are they interested in? What are the policy goals of House Republican leadership this legislative session? With the narrow passage of the millionaire’s tax bringing the state back to the days of Taxachusetts, what solutions will House Republicans offer during this week’s tax cut debate?
We understand that some progress was made on some tax reform in this bill, but with our state’s economic competitiveness waning, it’s worth reminding legislative Republicans that people are looking to them for leadership and they have an important statewide voice to lend to this debate. Without a Republican Governor in the corner office, it’s up to them to take the lead on offering alternatives.
They could offer tax amendments that highlight areas where we fall behind states like New Hampshire and Florida, which have been two of the most popular states Massachusetts residents flee to. With Republican Governor Charlie Baker gone, they could offer their own Republican budget to demonstrate concretely a conservative vision for governing the state. If House Republican leadership show no interest in demanding meaningful tax cut debates through their amendment process, who will?
We mentioned in our email yesterday that Democrats are going to try to repeal parts of the 62F tax cap rebate law that saw so many taxpayers get substantial tax refunds last year. If you’d like to help us put pressure on them to stop that, please consider contacting your legislators by using our safe and secure software here: https://www.votervoice.net/MASSFISCAL/campaigns/99818/respond
Massachusetts cannot afford a one-party state and House Republican leaders need to step up to the challenge.