Full Repeal of the Harmful Estate Tax Would Earn Lavish Praise from Taxpayer Advocacy Organization
As reported in today’s Politico Massachusetts Playbook & by the Lawrence Eagle-Tribune, Gov. Maura Healey has stated that her administration supports lifting the estate tax threshold from $1M to $2M. Massachusetts is only one of only twelve states that still has an estate tax and we currently have the most aggressive estate tax in the country, with the tax being triggered at just $1M. Once triggered, it taxes all assets below $1M. Many states are repealing their estate tax altogether due to its harmful outcome of forcing taxpayers to move out of state or domicile elsewhere. Even President Biden’s home state of Delaware recently repealed the tax. Many progressive tax states such as California do not even have an estate tax.
While MassFiscal offered a restrained applause for Gov. Healey seeing the value in lifting the threshold of this harmful tax, the Alliance would lavish praise to the liberal Democratic Governor if she vowed to eliminate the tax altogether in response to Question 1’s narrow passage. Question 1 has raised the state income tax by 80 percent on some small businesses, retirees, home sales, and high-income earners. According to the Tax Foundation, prior to Question 1’s narrow passage, Massachusetts was the 4th highest state in the county to see the number of taxpayers leave its state. Question 1, in conjunction with the most aggressive estate tax in the country, will only exacerbate the outflow of taxpayers and their wealth from the Commonwealth.
“While it is slightly encouraging to see Gov. Maura Healey see the value in lowering the country’s most aggressive estate tax, this proposed adjustment is still just a tweak of a deeply flawed system. Massachusetts would still end up having the country’s third most aggressive estate tax in the country. This tweak may bring some temporary relief, but it will not stop the outward migration of taxpayers due to Question 1 and the estate tax. If Gov. Healey supported the full repeal of the estate tax, which many blue states are doing, MassFiscal would lavish praise to the new Governor for adopting a policy that puts us in line to compete with 38 other states which don’t have an estate tax,” stated Paul D. Craney, spokesman for the Massachusetts Fiscal Alliance.
“Economic competitiveness matters now more than ever before. With the narrow passage of Question 1, Massachusetts lost an important edge-- the constitutionally protected flat tax for all state taxpayers. As a result, the Governor and legislative leaders are entering this new session in a whole new world. Taxachusetts has been resurrected and the only way to climb out of this hole is by cutting broad taxes and eliminating certain taxes altogether. The estate tax is one of those taxes that should be eliminated for good. Anything short of a full repeal does not put us in line with 38 other states,” concluded Craney.