The legislature’s revenue committee on Friday advanced a $600 million tax relief package, but the group’s House speaker said the measure remains a work in progress.
The committee voted 17-0, according to House Speaker Rep. Mark Cusack, to advance a redraft of Gov. Charlie Baker’s tax relief plan that does not include Baker’s call for a rate cut short-term capital gain. Committee members were not interested in that part of the governor’s bill, Cusack said.
“The rest of the bill is intact,” Cusack said.
Baker tabled a nearly $700 million package in January offering tax relief for renters, seniors, parents and low-income workers. He also recommended changes in how Massachusetts handles estate and capital gains taxes.
The bill will be further developed by the House Ways and Means Committee, Cusack said, advising against viewing the revenue committee’s bill as the House plan.
“It just moves it through the process,” said Cusack, D-Braintree, whose panel faced a Friday deadline to make a recommendation on the bill.
Regarding the rest of the measures in the Baker bill, Cusack said, “Those are the areas where we had some consensus, some interest.”
Senate President Karen Spilka said last month that a tax relief package could include changes to the earned income tax credit and estate tax.
On Friday, Cusack mentioned the earned income tax credit as a potential area of interest for those studying tax relief, and the EITC bills were among a menu of relief proposals that have been “attached” to the new wording of the Governor’s bill and released by the Revenue Committee on Friday.
The committee voted on the governor’s bills and others after releasing an electronic poll late Thursday, with voting closing at 1 p.m. Friday.
“The cost of just about everything is going up, and these tax breaks would help offset some of those costs for families,” Baker said when rolling out his plan in January. “From a tax perspective, Massachusetts is in a very strong financial position and able to provide this tax relief while continuing to make big investments in our people, schools and communities.”
Baker described the 12% tax on short-term capital gains as “grossly uncompetitive with the rest of the country” and said a 5% rate would treat this money the same as other revenues and bring Massachusetts in line with other states. In 2019, more than 150,000 filers paid the tax, more than 61,000 of whom had incomes below $112,000, according to the governor’s budget.
Additionally, Baker wants to double the tax credits for dependents and child care, double the maximum allowed for the main breaker property tax credit, and increase the cap on deductions for rent payments by 3. $000 to $5000.