There were no roll calls in the House or Senate last week. This week, Beacon Hill Roll Call reviews local senators’ votes in the 2023-2024 on several proposals to raise or lower taxes. Included are comments from legislators and others at the time the measures were voted upon.

Tax relief package (H 4104)

Senate 38-1, approved a tax relief package that supporters said will provide $561.3 million in tax relief in fiscal year 2024 and $1.02 billion per year in subsequent years.

Provisions include increasing the rental deduction cap from $3,000 to $4,000; reducing the estate tax for all taxpayers and eliminating the tax for all estates under $2 million by allowing a uniform credit of $99,600; increasing the refundable tax credit for a dependent child, disabled adult or senior from $180 to $310 per dependent in taxable year 2023, and then to $440 in subsequent years while eliminating the child/dependent cap; doubling the refundable senior circuit breaker tax credit from $1,200 to $2,400; increasing the refundable Earned Income Tax Credit from 30 percent to 40 percent of the federal credit; and reducing the short-term capital gains tax rate from 12 percent to 8.5 percent.

Other provisions double the lead paint tax credit to $3,000 for full abatement and $1,000 for partial abatement; ensure that employer student loan payments are not treated as taxable compensation; make public transit fares, as well as ferry and regional transit passes and bike commuter expenses, eligible for the commuter expense tax deduction; increase from $1,500 to $2,000 the maximum that municipalities may pay seniors to do volunteer work to reduce their property taxes; raise the annual authorization for the low income housing tax credit from $40 million to $60 million; and allow cities and towns to adopt a local property tax exemption for affordable real estate that is rented by a person whose income is less than a certain level set by the municipality.

“We are thrilled to deliver on our promise to pass tax cuts that will result in real savings for the people of Massachusetts, including the country’s largest child and family tax credit that will go back in the pockets of parents and caregivers,” said Gov. Healey. “Everywhere we go, we hear about how people are struggling to keep up with the rising cost of living. This tax package delivers savings for those who need it most, while making long overdue changes that will better allow Massachusetts to compete with other states.”

“This tax relief package strikes the critically important balance of providing permanent financial relief to residents and businesses across Massachusetts, without compromising the long-term financial security of the commonwealth,” said House Speaker Ron Mariano (D-Quincy). “I’m confident that this tax reform legislation will help to make Massachusetts more affordable for all residents, while also helping to make the commonwealth more competitive with other states.”

The measure also includes two provisions which the opponents said will result in tax hikes. One would require Massachusetts married couples who file income tax returns jointly at the federal level to do the same at the state level. The other changes are the system under Chapter 62F that requires that annual tax revenue above a certain amount collected by the state go back to the taxpayers. Under current law, the money is returned to taxpayers based on what he or she earned and paid in taxes. The new tax package changed that and provided that each taxpayer will receive a flat rate refund, unrelated to what they earned or paid in taxes.

“The High Tech Council appreciates the effort Gov. Healey and the Legislature put into this first step towards addressing the state’s tax outlier status,” said High Tech Council President Chris Anderson. “Unfortunately, the final tax ‘relief’ legislation falls short of delivering the meaningful change needed, as it includes both an expansion of the voter-approved income surtax and an unconstitutional redistribution of income through changes to the voter-approved Chapter 62F rebate formula.”

Anderson concluded, “The High Tech Council looks forward to collaborating with Gov. Healey, her cabinet and legislators across the commonwealth who are committed to defending and strengthening our business climate and the associated high quality of life it brings to Massachusetts residents.”

(A “Yes” vote is for the tax relief package. A “No” vote is against it.)

Sen. Joanne Comerford – Yes

Sen. Paul Mark – Yes

File taxes jointly (S 2387)

Senate 33-5, approved an amendment that would require Massachusetts couples who file income tax returns jointly at the federal level do the same at the state level.

Supporters said this amendment will close a loophole that allows some married couples to file individually – an action that could be used to minimize or avoid the person’s state tax obligations under the recent 4 percent surtax which is in addition to the current flat 5 percent one, on taxpayers’ earnings of more than $1 million annually.

Opponents said if filers are forced to file jointly at the state level, the 4 percent surtax will apply to many more filers, which is not what the voters approved on the November 2022 ballot question imposing the 4 percent surtax.

(A “Yes” vote is for the amendment requiring joint filing. A “No” vote is against the amendment.)

Sen. Joanne Comerford – Yes

Sen. Paul Mark – Yes

Reduce short term capital gains tax (S 2397)

Senate 5-32, rejected an amendment that would reduce the short-term capital gains tax from 12 percent to 5 percent.

Amendment supporters said that there are 26 states that currently tax short-term capital gains at a rate of 5 percent or lower, including all of the Bay State’s surrounding states. They asked why the capital gains tax or any tax imposed should be charged at a higher rate than earned income.

Amendment opponents said the state cannot afford the $117 million loss in revenue that this tax cut would cost this year. They argued the cut would do nothing to help the costs of housing and living.

(A “Yes” vote is for the reduction to 5 percent. A “No” vote is against the reduction.)

Sen. Joanne Comerford – No

Sen. Paul Mark – No

Increase estate/death tax exemptions (S 2397)

Senate 5-33, rejected an amendment that would increase from $1 million to $5 million the amount of money that is tax exempt from the value of a person’s estate when calculating the state’s estate/death tax that a person is required to pay following their death before distribution to any beneficiary. The increase to $5 million would be implemented over ten years.

Most Republicans are against any such tax and coined the name “death tax” to imply that the government taxes you even after you die. Most Democrats support the tax and call it an “estate tax” to imply that this tax is mostly paid by the wealthy.

Amendment supporters said that Massachusetts is one of only 12 states that have an estate/death tax and that the Bay State’s is the most aggressive of the 12. They said that in light of the high value of houses, with the average home price more than $500,000, the $1 million threshold of this “unfair and regressive” tax is too low and noted the federal tax exempts the first $12 million. They noted that Massachusetts is losing many residents, who move to Florida and other states where this tax does not even exist.

Amendment opponents said the proposed bill already raises the exemption from $1 million to $2 million and noted that will cost $185 million. They said a hike to $5 million is excessive and unaffordable and will cost hundreds of millions of dollars more. They noted that lowering the estate tax is not the only way to help seniors and their families and noted there are many other initiatives in the bill that help seniors.

(A “Yes” vote is for increasing the exemption to $5 million. A “No” vote is against increasing it.)

Sen. Joanne Comerford – No

Sen. Paul Mark – No

Tax revenue from millionaire’s tax (S 3)

Senate 5-34, rejected an amendment that would remove a section in the budget that exempts tax revenue generated from the recently voter-approved Millionaire Tax from counting toward the allowable state tax revenue limitations, under Chapter 62F, which provides that whenever revenue collections in a fiscal year exceed an annual cap tied to wage and salary growth, the excess is returned to taxpayers.

Last year, $3 billion in refunds were returned to taxpayers when the law was triggered for just the second time since its passage in 1986. The revenue from the Millionaire Tax is deposited into the new Education and Transportation Stabilization Fund.

“It’s refreshing to see some lawmakers put the interests of the taxpayers at the forefront,” said Paul Craney, a spokesperson for the Mass Fiscal Alliance which supported the amendment to remove the section. “Senate Republicans came to today’s debate well prepared. They passionately spoke out in favor of their ideas to protect the taxpayers and preserve the very popular taxpayer protection voter approved law known as 62F. Senate Democrats want to break the will of the voters by excluding the new millionaire’s tax revenue from the total calculation for rebates back to the taxpayers from 62F. That goes against the will of the voters as the law is written and today’s debate by Senate Republicans made that point very clearly.”

Amendment opponents said the amendment will put the new revenue in jeopardy and argued this new revenue is earmarked for education and transportation and must be protected and treated differently than other tax revenue.

(Please note what a “Yes” and “No” vote mean. The amendment was on striking the section that exempts tax revenue generated from the recently voter-approved Millionaire Tax from counting toward the allowable state tax revenue limitations. Therefore, a “Yes” vote is for the amendment that favors tax revenue generated from the recently voter-approved Millionaire Tax counting toward the allowable state tax revenue limitations. A “No” vote is against the amendment and supports exempting the revenue from the allowable state tax revenue limitations.)

Sen. Joanne Comerford – No

Sen. Paul Mark – No

Send 90 percent of capital gains tax revenue above $1 billion to the Rainy Day Fund (S 3)

Senate 3-36, rejected an amendment that would maintain the current 90/5/5 law under which 90 percent of the capital gains tax collections exceeding $1 billion goes to the Rainy Day Fund, 5 percent to the State Retiree Benefits Trust Fund and 5 percent to the State Pension Liability Fund. The amendment would replace a pending 60/20/20 proposal that would send, in fiscal 2024 only, 60 percent of the $1 billion excess to the Rainy Day Fund while sending 20 percent to the State Retiree Benefits Trust Fund and 20 percent to the State Pension Liability Fund.

Amendment supporters said it is essential to provide 90 percent to the Rainy Day Fund which helps bail out the state during slow economic times when tax revenues shrink.

Amendment opponents said the Rainy Day Fund is flush with $7 billion and argued these retiree and pension funds are currently underfunded and need some additional money for just one year.

(A “Yes” vote is for maintaining the current 90/5/5 formula. A “No” vote is for the 60/20/20 formula.)

Sen. Joanne Comerford – No

Sen. Paul Mark – No