Much to the chagrin of progressives, the House passed their version of a tax cut package just a day after revealing they would spend $56.2 billion in the next fiscal year.
“We’ve all heard from our constituents and our business about the cost and struggles they are dealing with and the new reality of life and work since the pandemic,” state Rep. Mark Cusack, the Chairman of the Joint Committee on Revenue, told the House before the vote.
Called An Act to improve the Commonwealth’s competitiveness, affordability, and equity, the state House passed H.3770 by a vote of 150-3 on Thursday, with five state representatives not voting.
State Rep. Mike Connolly, a progressive representing most of Cambridge, was one of the lawmakers who tried to stop or change the bill, but with his resistance joined only by Democratic Rep. Erika Uyterhoeven of Somerville and Acton’s Rep. Dan Sena, he withdrew his offered amendment before declaring he could not support cutting taxes for the state’s wealthiest.
“Let me begin by acknowledging there is so much in the bill before us today that we can appreciate that I know my constituents will appreciate,” he said. “Yet, there are real concerns about the parts of this bill that overwhelmingly benefit big corporations and the very wealthy.”
The House’s plan, as approved, would provide $654 million in tax relief in fiscal 2024 and $1.1 billion in relief through fiscal 2026 and beyond.
It would slash the short-term capital gains tax from 12% to 5% and double the death tax threshold while eliminating the so-called “cliff effect” whereby an entire estate is taxed when it’s made subject to the rule.
It would implement a child tax credit that by 2027 would allow parents and caregivers to claim a $614 credit per dependent child. The plan would also increase the rental deduction from $3,000 to $4,000 and double the senior circuit breaker to $2,400.
Andrew Farnitano, a spokesperson for the group behind the state’s Fair Share Amendment, said the November passage of that new constitutional amendment demonstrates voters want higher taxes on the wealthy, not cuts.
“The tax plan being proposed by the House would give away hundreds of millions of dollars each year to the ultra-wealthy and large corporations, defying the clearly-expressed will of the voters. Every dollar spent on these tax cuts is a dollar that cannot be spent on affordable housing, child care, healthcare, and other critical solutions to the Commonwealth’s affordability crisis,” he said in a written statement following the House vote.
The bill also proposes a change to Chapter 62F of the General Laws, a provision which suddenly sent $3 billion back to taxpayers despite the fact the Legislature had already slated it to be spent elsewhere, resulting in the death of a unanimously approved economic development bill.
The House’s suggested change would untether any future returns under the law from a taxpayer’s income, which is how the rebates are calculated now.