Massachusetts Budget and Policy Center: Facts At A Glance – The Income Tax: Another Reform Option
ITEP Work in ActionPrevious MassBudget fact sheets have examined the Massachusetts personal income tax and a number of reform options (see “Facts At A Glance: The Income Tax”, available at http://www.massbudget.org/768). This Facts At A Glance examines another reform option (currently before the Legislature) that would make changes to the way the Commonwealth taxes wage and salary income as well as investment income. The Department of Revenue (DOR) recently examined this reform option and estimated that the proposal’s combined changes would generate between $1.33 billion and $1.41 billion (middle of range = $1.37 billion) in new revenues in its first full year after implementation.1 This Facts At A Glance describes DOR’s revenue estimates and also provides an analysis from the Institute on Taxation and Economic Policy showing how people at different income levels would be affected by the changes. Additionally, it looks at the proposed changes in the broader context of our state’s current tax system and recent federal tax policy choices.