Inside the governor’s $742 million plan to save taxpayers money.
Gov. Maura Healey unveiled her anticipated tax relief proposal on Monday, a $742 million package that would increase key taxpayer supports, such as a $600 child and family credit, while also lowering the state’s estate taxes and eliminating the short-term capital gains tax.
Healey stated that the package is aimed at providing relief to families, renters, seniors, commuters, farmers, and other residents who are feeling the pinch of the state’s high cost of living, which has driven some residents, including businesses, away in recent years.
“To put it simply, we’re not at the forefront of affordability,” Healey said at a press conference at the Demakes Family YMCA in Lynn. “Too many other states are passing us by, hurting our ability to compete. That is why we are putting these reforms first. Our administration is confident that the package we proposed today will make significant progress toward Massachusetts’ goals of driving affordability, driving competitiveness, and driving equity.”
The Child and Family Tax Credit, which is a combination of two existing benefits: the Household Dependent Tax Credit and the Dependent Care Tax Credit, is one of the plan’s main pillars.
Healey proposed a new benefit that would provide qualifying dependents with a $600 refundable credit.(Photo: bostonglobe.com)
According to Healey, by providing families with a $600 credit per dependent — applicable to children 13 years old or younger, people with disabilities, and senior dependents over the age of 65 — and eliminating the existing credit cap, an estimated 700,000 taxpayers and 1 million or more dependents stand to benefit from this mechanism alone.
“The Child and Family Tax Credit would ensure that large families do not miss out on receiving the full amount of support they require, and it will benefit Black and brown families who are more likely to rely on informal child care and have been left out of pre-existing credits,” said the Cambridge Democrat. “Our administration believes that this new benefit will make a significant difference in assisting families in keeping up with rising costs and making ends meet.”
Healey emphasized that her administration examined how the commonwealth compares to other states and implemented significant reforms, particularly in two areas where Massachusetts is an outlier: short-term capital gains and the estate tax.
Healey described the proposal as a “really sensible tax relief package” that would be covered by her budget.
“We are putting money back into the pockets of those who need it the most, as well as implementing some other reforms that will help us as a state be more competitive,” she said.
On Wednesday, the Healey administration will formally file its proposal alongside its first-ever budget proposal for fiscal year 2024.
On Monday morning, Boston Mayor Michelle Wu told WBUR that she had not seen the plan prior to the announcement, but was pleased to see the governor follow through on her campaign promise to help offset taxes.
“Certainly, families are struggling and need relief, and our tax code is one way where we can provide that targeted relief,” Wu said on “Radio Boston.” “I also know that we want to ensure that there are revenues left over for long-term planning and infrastructure, transportation and education, and all of those priorities that have sometimes been underfunded because they are more long term.”
Notably, Healey’s proposal closely resembles the failed package put forth by her predecessor, Republican Gov. Charlie Baker, last year, which also included estate tax reform and a reduction in the capital gains component.
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