Taxes
Recent
Estate Tax Cuts Worsen Our Large Racial Wealth Gap
If lawmakers cut the Massachusetts estate tax, it is a small number of high-income, white households that will receive the overwhelming share of the benefits. These cuts would worsen the problem of wealth inequality and undermine our ability to address the problem.
Estate Tax Cut Proposals Are Costly and Poorly Targeted – Alternative Solutions Exist
Current estate tax proposals would lead loss of state revenue would reduce the Commonwealth’s ability to make crucial investments, while having regressive impacts on racial and economic equity. The state should seek alternatives.
What’s Race Got to Do With It? Some Tax Proposals Would Widen Racial Inequality, Others Would Advance Equity
Some of the tax cuts proposed by the Massachusetts House in 2023 would widen economic and racial disparities by disproportionately benefiting wealthier, generally whiter households. Other proposed tax changes would advance equity and would disproportionately benefit households of color.
ALL TAXES REPORTS
Who Pays? Low and Middle Earners in Massachusetts Pay Larger Share of their Incomes in Taxes
Taxes are the main way communities pay for the things we do together. Taxes pay for essential programs and infrastructure we take for granted, like fire protection, public education, and health inspectors; roads, bridges, and public transit; and the support for people facing hard times. Examining how much people at different income levels pay in taxes is important when considering the fairness of tax policy.
What Has Happened in Other States with High Tax Rates on Million-Dollar Incomes?
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.
What Does the Federal Tax Law Mean for Massachusetts and How Might the Commonwealth Respond?
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.
The Evidence on Millionaire Migration and Taxes
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.
Funding Improvements for Schools, Roads, and Public Transit with Tax Reforms that Improve Fairness
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.
Sweeter than SALT: Highest-Income Households Get Federal Tax Cuts More Than Twice SALT Losses
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.
How Slow Sales Tax Growth Causes Funding Problems for the MBTA
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.
