The Senate Committee on Ways and Means (SWM) released a budget proposal that illustrates again how a state budget can be a powerful tool for advancing equity and improving well-being – as long as policymakers don’t decide to give hundreds of millions of dollars of revenue each year to the wealthiest residents of the Commonwealth.
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The House Fiscal Year (FY) 2023 budget reflects many of the challenges the state faces moving out of the most acute phases of the COVID-19 pandemic, but has also taken a first step towards creating a budget that pushes the state towards equity in several important areas.
Massachusetts can have an economy that generates broad prosperity and home-grown millionaires with world-class education and infrastructure. Several other states have top income-tax rates as high, or substantially higher, than what is proposed in Massachusetts. Those states do not have fewer millionaires, and have not seen less growth in their share of millionaires over time.
Organized as a series of charts, this paper details major trends since Fiscal Year 2001 in state support for our public colleges and universities in Massachusetts, and how those changes have led to sharply increasing costs for students and families, which they pay for with increasing amounts of debt. On several measures we compare Massachusetts to other states.
The Governor’s Fiscal Year (FY) 2019 budget proposal level funds much of state government, includes some targeted initiatives – including an expanded earned income tax credit (EITC) and new services for people struggling with and recovering from mental illness – and proposes small reductions in funding, after accounting for inflation, for higher education and other areas.
The new federal tax law reduces federal revenues by approximately $1.5 trillion largely by cutting taxes for corporations, people receiving inheritance from very large estates, and high-income owners of pass-through entities such as partnerships. The law provides reduced tax rates and relatively smaller tax reductions to most wage and salary earners while disproportionately benefiting those with high incomes. This paper examines the distribution of tax cuts, the impact of how they may be paid for, how the law interacts with Massachusetts policies, and what the Commonwealth could do to take its own direction different from the federal government.
This policy brief examines the evidence on the likely migration effects of raising income taxes on households with taxable annual income above $1 million and the impacts on net state revenue.
A ballot question has been proposed that would support investments in education and transportation with revenue from an additional 4% tax on income over a million dollars a year. This factsheet examines this proposal and how it relates to longer term economic and policy trends in Massachusetts.
The federal government has enacted very large tax cuts targeted mostly at higher-income taxpayers. The resulting loss of an almost $1.5 trillion in federal revenue is likely to lead to cuts in federal support for programs that are important to people in Massachusetts and to the state budget. Amid these deep tax cuts, a new federal limit on the deductibility of state and local taxes (SALT) has received a lot of attention. Households that itemize deductions and pay over $10,000 in combined state and local taxes will no longer be able to deduct more than this amount when calculating their taxable income for federal taxes.
The Fiscal Year (FY) 2019 budget year could be the most eventful in decades, with major changes in federal policy looming and ballot questions that could reshape state tax policy likely to appear on the November ballot. This year’s budget will be written in a climate of uncertainty, and against a backdrop of ongoing fiscal challenges.
Almost 20 years ago, a penny of the sales tax was dedicated to the MBTA to be a steadily growing source of revenue for the transit system. But despite some help from the Legislature, the sales tax transfer has grown slower than the economy, creating a persistent gap between the projected funds and actual sales tax transfers. Sales taxes have underperformed for the MBTA as a result of a shift to services, some transactions moving online, and exclusion of fast-growing meals tax revenues from the MBTA. An appendix explains the formula for determining the MBTA sales tax transfer and how other sales taxes are allocated.