Friday, August 5, 2022

CommonWealth Magazine: after all the he said/she said, tax credit might be less than Gov Baker claimed

"AS THEIR CAREFULLY crafted plans for tax relief and massive spending outlays began to slip away with last Thursday’s stunning news about a 1986 tax law, frustrated Democrats on Beacon Hill went into spin mode.

First, late Friday afternoon, Rep. Christine Barber of Somerville took to the House floor to suggest that plans by the Baker administration to sweep a $225 million fund may have been part of the administration’s move to trigger the 36-year-old law that the Baker administration a day earlier said could force nearly $3 billion in tax relief later this year, or about 7 percent of the income taxes paid in 2021.

“It’s becoming clear that to cover closing costs for 2022 and to possibly pay for the $2.8 billion that will go to the taxpayers under Chapter 62F, there may have been some other need for these funds,” Barber said. “I hope that those funds were not used at the expense of covering low and moderate income families’ health care, but that looks like what might be happening. But we know that rather than spend these funds that were in the Commonwealth Care Trust Fund, the governor swept those funds out and then replaced this new program that we created with a study.”
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"STATE OFFICIALS said on Thursday that tax revenues grew by more than 20 percent in the most recently completed fiscal year, but that growth will nevertheless yield a tax cap credit that is probably more than $600 million less than what the Baker administration estimated last week.

The tax cap is a 1986 law that sets “allowable” tax revenue the state can take in during a given year and requires collections in excess of that amount to be returned to taxpayers in the form of a credit."
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