Wednesday, January 24, 2018

MassBudget: What the federal tax law means for Massachusetts

MassBudget  Information.
 Massachusetts Budget and Policy Center  Democracy.

Study Finds Federal Tax Changes Primarily Benefit Massachusetts' Highest Income Households, Outlines Potential State Responses

Rather than making the kinds of investments in people and communities that could strengthen the economy and expand opportunity, the federal government recently enacted a $1.5 trillion tax cut package that is tilted sharply towards very high income-households and corporations.

 The Massachusetts Budget and Policy Center's new report finds that in 2019 the average tax cut - including the effects of corporate cuts that eventually flow through to individuals - for the highest-income one percent of Massachusetts households will be $84,720. These tax cuts will likely lead to deep cuts in federal programs that people in Massachusetts rely on, and will make it very unlikely that the federal government will be able to address issues like making higher education affordable, improving public schools, or strengthening our transportation infrastructure.

The report also explores a number of specific provisions of the federal tax law that could directly affect state finances because of interactions between our state tax code and the federal code including the following:
  • A gradual erosion of the value of the state Earned Income Tax Credit
  • Extension of 529 college savings plans to subsidize private primary and secondary school tuition
  • Various changes to corporate tax rules that could have positive and negative effects on state tax revenue

Read the report here (LINK).
The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

BOSTON, MA 02108
Massachusetts Budget and Policy Center, 15 Court Square, Suite 700, Boston, MA 02108

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