Category: Taxes

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Massachusetts Ranks 33rd in Taxes in FY 2009

On October 31 the U.S. Census Bureau released its annual update of State and Local Government Finances, providing national data for Fiscal Year 2009. The amount of state and local taxes paid in Massachusetts as a share of total personal income was 9.8 percent in FY 2009. By this measure, Massachusetts had lower taxes than 32 other states. Measuring taxes as a share of total personal income allows for a meaningful comparison among states.

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Allowing for More Meaningful Comparisons: Taxes and Spending as a Share of Personal Income

This Facts At A Glance describes methodological issues regarding the comparison of tax and spending levels between different time periods or different states.

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The Income Tax

Massachusetts has an income tax rate of 5.3 percent. The income tax is the single-largest source of revenue for the state, with collections totaling $10.1 billion in Fiscal Year (FY) 2010. Forty-three states have an income tax, several with rates as high as 11 percent. Of the states with an income tax, Massachusetts is one of only seven states that do not have a higher income tax rate for those with higher incomes.

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Extending Improvements to Tax Credits for Lower-Income Workers and Their Families

This fall, Congress will debate whether to extend tax cuts adopted over the past decade. While there appears to be general agreement among policymakers that the major middle-class tax cuts should be extended — and significant debate about whether the tax cuts that benefit only the highest-income taxpayers ought to continue — there has been less attention paid to the fate of tax provisions that are targeted at lower-income working families.

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Understanding Our Tax System: A Primer for Active Citizens

This primer provides an overview of the Commonwealth’s tax system as well as clear information and analysis of how Massachusetts compares to other states and how our state’s tax system has changed over time. Also please see individual fact sheets on the income tax, the sales tax, tax fairness, and on the “Taxachusetts” label.

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Expiring Federal Tax Cuts: Costs and Beneficiaries of Extending Cuts Targeted at Highest-Income Taxpayers

In the coming weeks, the U.S. House and Senate may debate whether to extend (or make permanent) all or only some of the Bush-era income tax cuts. The Congressional debate most likely will focus on whether to extend the tax cuts that affect only the wealthiest 2 percent of Americans–those households with adjusted gross income (AGI) above $200,000 for single filers and $250,000 for married couples.

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How Will New Tax on Alcohol Affect Revenues?

As part of a package of sales tax changes that went into effect in 2009, Massachusetts’ general sales tax rate was raised from 5 percent to 6.25 percent and alcoholic beverages were made newly subject to the general sales tax.

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Examining Tax Fairness

Determining who is affected most by the state’s tax system, as well as individual taxes, is important in considering the fairness of tax policy changes. While most taxes in Massachusetts have a fixed rate — for example, the state has a flat 5.3 percent income tax — different income groups are affected differently by each tax. These differences can be explained in terms of regressivity and progressivity–how taxes vary by income level.

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Massachusetts Ranks 31st in Taxes in FY 2008

The amount of state and local taxes paid in Massachusetts as a share of state personal income remained well below the U.S. average in Fiscal Year 2008, according to the U.S. Census Bureau’s newly updated survey of State and Local Government Finances.

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New Corporate Tax Breaks Proposed in Economic Development Legislation

In economic development legislation under consideration in the House, there are proposals for new corporate tax breaks. This Facts At a Glance provides information about the provisions. (Updated July 13, 2010)

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