(The Center Square) – Preventing residents from fleeing Massachusetts due to aggressive taxes is the focus on a public policy group.
Massachusetts Fiscal Alliance is urging Democratic Gov. Maura Healey to repeal what it calls one of the most aggressive taxes in the country – the estate tax.
“While it is slightly encouraging to see Gov. Maura Healey see the value in lowering the country’s most aggressive estate tax, this proposed adjustment is still just a tweak of a deeply flawed system,” Massachusetts Fiscal Alliance spokesman Paul D. Craney said in a release. “Massachusetts would still end up having the country’s third most aggressive estate tax in the country. This tweak may bring some temporary relief, but it will not stop the outward migration of taxpayers due to Question 1 and the estate tax.
“If Gov. Healey supported the full repeal of the estate tax, which many blue states are doing, MassFiscal would lavish praise to the new governor for adopting a policy that puts us in line to compete with 38 other states which don’t have an estate tax.”
According to the policy group, Healey said there is a desire to see the state’s estate tax raised to $2 million, up from its current standing of $1 million.
Under the current tax structure, according to the release, the estate tax is triggered at the $1 million threshold. Then all assets below that mark are taxed.
The policy group said Massachusetts is just one of 12 states that have an estate tax, and the Bay State’s tax is one of the most aggressive in the country.
Massachusetts Fiscal Alliance said that “many states are repealing their state tax altogether” due to the tariff “forcing taxpayers to move out of state” or choose to live elsewhere.
“Even President Biden’s home state of Delaware recently repealed the tax,” the organization wrote. “Many progressive tax states such as California do not even have an estate tax.”
The policy group said it would support Healey’s move to “eliminate the tax altogether” on the heels of Question 1’s narrow passage that went into effect on Jan. 1. Question 1 enacted a millionaire’s tax on all income above $1 million.
“Question 1 has raised the state income tax by 80%,” the policy group wrote, “on some small businesses, retirees, home sales, and high-income earners.”
Prior to the millionaire’s tax going into effect, the organization said, Massachusetts had the fourth highest rate in the country for taxpayers leaving the state.
“Question 1, in conjunction with the most aggressive estate tax in the country, will only exacerbate the outflow of taxpayers and their wealth from the Commonwealth,” the group wrote.
“Economic competitiveness matters now more than ever before,” Craney said. “With the narrow passage of Question 1, Massachusetts lost an important edge-- the constitutionally protected flat tax for all state taxpayers. As a result, the governor and legislative leaders are entering this new session in a whole new world. Taxachusetts has been resurrected and the only way to climb out of this hole is by cutting broad taxes and eliminating certain taxes altogether. The estate tax is one of those taxes that should be eliminated for good. Anything short of a full repeal does not put us in line with 38 other states.”