Analysis: House Tax Plan Recognizes Need to Compete

Amid some very concerning trends on outmigration — 110,000 people have left this state since early 2020 — Massachusetts House leaders have unveiled a tax-relief plan they believe will improve the state’s overall competitiveness.

The plan, which echoes much of what Gov. Maura Healey proposed in her own tax plan, would, among other things:

• Raise the estate-tax threshold by $1 million to $2 million and tax only the value of an estate that exceeds $2 million, and not the entire estate, as the law currently requires;

• Cut the rate on short-term capital gains from $12% to 5% in two years. During the first year, short-term capital gains would be taxed at 8%;

• Change how state corporate taxes are calculated to what is known as the ‘single sales factor,’ to line up with how most states tax companies now;

• Expand tax credits for seniors and renters; and

• Combine two existing tax credits — childcare and dependent care — to create one $600 credit per dependent, while eliminating the current cap.

The Senate has yet to release its tax plan, and there will be considerable debate before one plan — if there is one — eventually emerges.

But the House plan is cause for optimism in the Bay State. It shows that the chamber’s leaders get it when it comes to outmigration and the many ways in which this ongoing exodus is impacting the state and its business community.

It’s time to stem the tide, and this proposal is a step in that direction.