Earlier this year, Governor Deval Patrick released his proposal for the state’s 2014 budget. Of note, his plan to overhaul the Massachusetts tax system, which he estimates would raise roughly $1.95 billion in additional revenue for the state annually.
What would the proposal look like, and what will it mean for Bay State residents?
Changes to Income Tax:
- Personal income tax increase from 5.25% to 6.25%.
- ‘Personal exemption’ increase from $4,400 to $8,800 for singles and from $8,800 to $17,600 for married couples,
- Elimination of more than 40 personal income tax breaks.
Changes to Sales Tax:
- A decrease in sales tax from 6.25% to 4.5%,
- A new sales tax created for candy and soda purchases,
- A $1 increase in cigarette costs and equalization of the tax rate for other tobacco products,
- An adjustment of the gas tax to factor inflation.
Other proposed changes would be made to tax exemptions, business taxes, and various smaller initiatives.
With the possibility of these changes on the horizon, we want to know what you think. Do you think you pay too much? Do you feel you get what you pay for in return? Is a tax system overhaul necessary?
See how these changes would affect your own tax bill with the commonwealth’s new web tool and find out how your own changes would impact new revenues for the state.
For information on how the increased budget would be spent in your community for education and transportation, visit Mass.gov.
Read more about the proposal with a breakdown of the revenues generated and an analysis of their effects on different income brackets.