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.