Current Estate Tax Proposals Would Give Largest Benefits to Wealthiest Estates; Alternative Method Would Fix This Problem
The tax on inherited estates is Massachusetts’ only tax that directly reduces wealth inequality. Although the pandemic has highlighted disparities between rich and poor families, the Governor and some in the Legislature have proposed changes to the estate tax that would largely benefit the state’s wealthiest households.
As the Legislature considers elements of a possible tax package, it is worth focusing on a number of interrelated corporate tax issues that are now – or may become – part of the mix. At the heart of these interrelated issues is a problematic, state-level corporate tax break referred to as FAS 109.
The Massachusetts Budget and Policy Center was asked to outline options for changes to the estate tax that would preserve revenue, maintain progressivity, and also cut taxes on or exempt estates with a taxable value up to around $1.2 million. Since households subject to the estate tax are among the state’s wealthiest taxpayers, any reductions to revenue from the estate tax represent a transfer of wealth from the Commonwealth to its wealthiest families. Even so, some options are better than others.
ALL TAXES REPORTS
Testimony to the Economic Roundtable: We must ensure collective well-being and economic security in the Commonwealth
Read the full testimony from our President, Marie-Frances Rivera, for the Massachusetts Legislature’s April Virtual Economic Roundtable, originally scheduled for April 7, 2020.
It’s a sudden economic freefall like no other. By some estimates, Massachusetts will have 473,000 COVID-induced job layoffs and furloughs by summer. Most people with jobs won’t make or spend as much in the months ahead.
What is the Rainy Day Fund? The Stabilization Fund — often referred to as the “Rainy Day Fund”– is a cushion for times when state …
We Must Provide Robust Economic Relief and Recovery for Vulnerable Populations and Children in Massachusetts Policy is the lever that we can pull to bring …
This series of briefs examines the potential effects of licensing undocumented drivers in Massachusetts. The briefs look at the effects on public safety, child health, law enforcement efficiency, and the economy and state finances.
Cities and towns rely on property taxes as their chief source of revenue to provide vital public services and infrastructure. Low- and moderate-income households tend to pay a larger portion of income in property taxes than those with high incomes, especially considering how some taxes get passed on from owners to renters. This paper examines why this is the case and what existing policies help make property taxes more progressive.Finally seven kids of state and local policy reforms are discussed that would redirect responsibility for property taxes towards those most able to pay.
Taxing the GILTI: By Reversing 2018 Policy, MA Can Fight Corporate Tax Dodging & Raise $450 Million a Year [Corp. Tax Series Pt.5]
In a costly decision, the Massachusetts Legislature voted in 2018 to allow businesses to exclude 95 percent of GILTI from Massachusetts taxation. This choice will cost the Commonwealth as much as $450 million in lost revenue in the current tax year (2020). This is revenue that otherwise would come exclusively from profitable, multinational corporations doing business in Massachusetts – and in particular, from ones that are choosing to game the tax code.
With a new commitment to increasing state K-12 education funding and the ever more obvious need to repair and upgrade our transportation systems, will lawmakers have the revenue to make the necessary investments in these and other budget priorities?
FY 2021 BUDGET PREVIEW: Will the Governor reboot his dependent deduction proposal or take a more targeted approach?
Will the Governor again propose to double the state’s dependent deduction, which wasn’t adopted by the Legislature, or will state lawmakers provide more targeted tax support for working families with greater need?
Statement Against Decoupling from IRC Provisions Governing Business Interest Expense Deductibility (163(j)) and the Taxation of GILTI
In 2017, the federal government adopted the Tax Cuts and Job Act (TCJA), giving very large tax cuts to corporations. Nationwide, businesses had their annual …
This latest report analyzes how amid a decades-long decline in corporate income tax share businesses avoid $1.4B in 2019 tax, and explores policy solutions that could help restore the balance. Interested in the finding the full corporate tax series? Read our other reports on how business taxes compare to other states, on the Massachusetts corporate minimum tax, and the Single Sales Factor.
Credit Where Credit is Due: The EITC and CTC – two proven tools to keep low-paid workers out of poverty
One of the most successful ways to lift people out of poverty is through tax credits targeted to low- and moderate-income families. Families use these credits to reduce their income taxes or receive a refund check. The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are two widely successful tax credit programs for improving family economic security and well-being â€” combined, the credits lift more people out of poverty than any other federal program except Social Security. Nonetheless, there are opportunities to make these programs even better.
As the Commonwealth seeks to improve our aging transportation system, policy makers have considered raising the gas tax. This paper assesses the gas tax along several well-established criteria for evaluating taxes: efficiency, fairness, and reliability. Based on these criteria, the gas tax receives mixed grades. Offsetting the tax with low-income tax credits could help.
In honor of National Hispanic Heritage Month, also known as #LatinxHeritageMonth (running Sept. 15-Oct. 15), our infographics analyze the number of eligible Hispanic tax filers per county that could or already benefitting from the Earned Income Tax Credit (EITC).