Maximizing the Impact of Tax Cuts
Massachusetts' finances look very healthy, with tax revenues overflowing and aid from the federal government at unprecedented levels. State lawmakers are considering using some of this money for a package of targeted tax cuts.
Options abound, but with the legislative session set to end July 31, time is quite limited. This creates real risk, as poorly designed tax cuts could worsen inequality or generate future budget deficits.
To help lawmakers act swiftly and smartly, we have assembled this policy brief with the following core information:
- Key principles for avoiding risk and ensuring meaningful impact. This means balancing short- and long-term effects, looking at who benefits, and promoting economic competitiveness.
- Clear analysis of the options being discussed on and around Beacon Hill, including restructuring the estate tax, increasing child tax credits, and a great deal more. Wherever possible, we share cost estimates and offer concrete alternatives.
- Direct comparisons with other states, where there’s broad interest in one-time rebates and the earned income tax credit.