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Patrick Budget Eliminates 44 Tax Deductions

While specific deductions would end, personal exemptions would double under the Patrick budget.

A recent analysis of Gov. Deval Patrick's proposed budget finds that it eliminates 44 tax breaks that benefit a large slice of Massachusetts taxpayers.

Patrick's $34.8 billion FY2014 budget includes not only a 1 percentage point hike in the income tax – from 5.25 percent to 6.25 percent – but the end of such deductions such as the capital gains from the sale of a person's primary home, college tuition, and contributions to a health savings account.

The analysis, by the Massachusetts Taxpayers Foundation, found that the eliminations would raise an additional $1 billion for the commonwealth.

But Patrick's assistant secretary for fiscal policy, Gregory R. Mennis, told The Republican that that amount would be offset by the doubling of personal exemptions, which benefit all taxpayers. 

Another key aspect of Patrick's plan is the lowering of the sales tax from 6.25 percent to 4.5 percent.

When taking this change, along with the rise in personal exemptions, about half of Massachusetts households – in particular those earning less than $60,000 a year – will see their taxes stay the same or drop, by Mennis' calculations.

"It's important to look at the tax package as a whole," Mennis told The Republican. 

The goal of the budget, Patrick has said, is to make the tax code simpler and fairer, with the tax burden shifting from the lower and middle classes to the more affluent.

The bill is being reviewed by the House, which will release its budget proposal in April. 

Pat Brown February 26, 2013 at 07:08 PM
An alternative view supported by the Massachusetts Taxpayers' Foundation link given above, is that the income tax increase (with doubling of the personal exemption) and the sales' tax decrease basically cancel each other out. The net revenue increase will come primarily from expanding personal taxes, including eliminating the 44 personal deductions, for about $1.3 billion and additional corporate taxes for about $500 million. However, I don't see how we can have a budget discussion without acknowledging that public finance is a balance between revenues and expenditures. The specifics of the Governor's proposed investments are every bit as relevant as his revenue proposals. I'd like to see how the Governor justifies his investments--not just "people want them" or "they're for the future", but the actual benefits and returns he expects us to see and the price he expects to us to pay.
Cheryl Flynn February 26, 2013 at 09:12 PM
Taxachusetts, Goodbye. Going to NH - The "free-est" state in the U.S.
Cheryl Flynn February 26, 2013 at 09:15 PM
There will never a shortage of reasons for continuing to tax the people in MA to death, literally. Here's someone who is fed up with the Massachusetts government.
Mike Hullinger February 26, 2013 at 10:39 PM
If the Governor's proposed elimination of Tax deductions will raise $1 billion in revenue, while approximately half the Massachusetts households will see there taxes stay the same or drop, that means approximately half the households in Massachusetts will be responsible for paying $1 billion in additional taxes above what they are already paying. Why is it appropriate to place $1 billion in additional taxes on the backs of half the households in this State? Will representatives of this state vote to increase the tax burdens of half the households in thier district by an incremental $1 billion? If so, what is the justification for it?

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