Biz Groups: Big Tax Law Changes Needed To Help State Compete
Tax Relief “Urgently Needed” Says Biz Group Leader
Quintupling the estate tax threshold, slashing the capital gains tax rate, and expanding use of a single sales factor apportionment lead the tax reform ideas embraced Wednesday by one of the region’s leading business groups and an organization representing public accountants.
The Greater Boston Chamber of Commerce and Massachusetts Society of CPAs rolled out an 18-page document containing their recommendations for lawmakers and Gov. Maura Healey to overhaul the state’s tax code, arguing that the Bay State needs significant changes to remain economically competitive amid widespread workforce shortages and the pinch of rising prices.
“This proposal for tax reform is exactly what the Commonwealth — its residents, families, and businesses — need right now. To compete and win today, we need to address and solve for the negative effects and unintended consequences that make it difficult to start and sustain a business in Massachusetts and to work, live, and be successful here,” Greater Boston Chamber of Commerce President and CEO James Rooney said in a statement, calling tax relief “urgently needed.”
Their proposal calls for raising the threshold at which the estate tax kicks in from $1 million to $5 million, then increasing it annually based on the Consumer Price Index, and eliminating the so-called “cliff effect” that subjects the entire value, not just the amount over the threshold, to the tax.
Gov. Charlie Baker had targeted the estate tax as a priority in his unsuccessful push for tax reform last year, and lawmakers gave initial approval to a new $2 million threshold that eliminates the cliff effect but ultimately shelved their plan.
Another idea the Chamber and CPAs backed include dropping the short-term capital gains tax rate from 12 percent to 5 percent, which they said would move Massachusetts from the second-highest rate in the country to one shared by about half of all states. They also called for either an outright elimination of or overhaul to the “sting tax” applied to S-corporations with gross receipts over $6 million.
They said other tax reform ideas the Legislature initially approved but never finalized, including breaks for renters, seniors and caregivers, should be considered “in addition to, rather than in place of, this proposal.”
Healey described tax relief as a top priority while she was on the campaign trail but has not laid out any specific plans more than three weeks into her tenure and top Democrats in the Legislature have not been eager to roll out tax reform plans early in the new session.