fb-pixel Skip to main content

Lower taxes in Massachusetts? Yes, please.

Families, low-income workers, and seniors deserve a break, and the estate tax merits an overhaul.

Governor Charlie Baker's proposed $700 million in tax cuts targets low-income workers, renters, and low-income seniors while making some long-overdue changes to the state’s estate tax.David L. Ryan/Globe Staff

In his final year in office, Governor Charlie Baker has decided to go big on the issue of tax cuts before he goes home.

And in proposing nearly $700 million in cuts as part of the coming year’s state budget, Baker has set two worthy goals: making life a little easier for the state’s neediest amid a bout of inflation, and improving Massachusetts’ competitive advantage at a time when the remote office has made workers more footloose than ever.

Democratic lawmakers will surely have their own ideas and their own priorities, but Baker’s menu of tax cut options has provided a number of possibilities that can and should prove too attractive, too obvious, and much too needed to ignore.


“The cost of just about everything is going up, and these tax breaks would help offset some of those costs for families,” Baker said at a news conference this week to outline major elements of his $48.5 billion spending plan. “The last two years have been pretty tough on a lot of the populations we’re looking to help here, and I’d love to see the Legislature take them seriously.”

The state has indeed had an embarrassment of riches in the past year or so — not including the money pouring in from the federal government. The rainy day fund is expected to be comfortably full, at $5.9 billion, before the next budgetary year begins, and Baker’s budget generously funds aid to cities and towns and education while proposing a major boost to housing programs. So if ever there is a year to restructure some taxes, this is the one.

Baker has attempted a delicate political balancing act here as well, targeting tax benefits to low-income workers, renters, and low-income seniors while making some long-overdue changes to the state’s estate tax, which has the dubious distinction of being about the most onerous in the nation.


Tax breaks aimed at, as Baker put it in his State of the Commonwealth address, “those struggling to make ends meet,” include:

▪ Doubling the current allowable tax credits for dependent and child care, which would put some $167 million into the pockets of more than 700,000 families.

▪ Doubling the “circuit breaker” property tax credit for income-eligible seniors, a $60 million item.

▪ Increasing the current cap on rent deductions from $3,000 to $5,000, a $77 million item.

▪ Raising the income level at which people are required to file an income tax return from $8,000 for a single filer to $12,400; from $14,400 for those filing as a head of household to $18,650; and for joint filers from $16,400 to $24,800. That, according to the Baker administration, would put $41 million back into the pockets of 234,000 low-income taxpayers.

It’s hard to argue with Baker’s pitch that it’s time to give back to hard-pressed Massachusetts families “some of the tax revenue they created through their hard work.”

And it’s just as hard to argue against those long overdue changes to the estate tax, which makes Massachusetts “an outlier among the states,” as the Massachusetts Taxpayers Association said in its analysis of the governor’s proposals.

First, Massachusetts is one of only 12 states that levies an estate tax. There’s a good reason (other than the sunshine) retirees head to places like Florida or opt for that ski chalet in New Hampshire. And, along with Oregon, Massachusetts has the lowest threshold for taxation — $1 million, which applies to the entire value of an estate. That includes stocks, bonds, 401(k)s, and proceeds from life insurance policies. And real estate — with the median price of a single-family home in Greater Boston now around $750,000, it’s pretty easy to hit that benchmark.


But wait, as they say in those infomercials, there’s more. Go over that $1 million and the estate tax applies to the entire value of the estate — something even Oregon, which only taxes the amount above that $1 million mark, doesn’t do.

Baker proposes to raise the exemption to $2 million and apply the tax only on the amount over that threshold.

The cost in foregone state revenue in its first year is estimated by the administration at $231 million. But let there be no mistake — even in the midst of an upcoming debate over the so-called millionaires income surtax — this is no giveaway to high earners. High earners are expert at planned tax avoidance long before they leave this earth. Some will simply establish residence in a no-tax state or set up elaborate trusts — or both. It’s the middle class that has borne the burden of this tax and will continue to do so until it is fixed.

Massachusetts lawmakers have always been adept at finding more and better ways to spend taxpayer dollars — some of those projects wise, but some of them in the you-can’t-have-enough-town-gazebos category. It’s been a tough two years for many in this state. Several well-targeted tax breaks would help ease that burden — and help the state shed its long-outdated Taxachusetts image in the process.


Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.