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| Filename | SALT-Cap-WP.pdf |
| Filesize | 1 MB |
| Version | 1 |
| Date added | September 27, 2021 |
| Downloaded | 10962 times |
| Category | Economic Opportunity, Massachusetts Economy, State Budget, White Papers |
Date: September 27, 2021
Authors: Greg Sullivan, Andrew Mikula, and Liv Leone
After the authors of the proposed graduated tax in Massachusetts submitted their proposal for legislative approval in 2017, the federal government placed a $10,000 limitation of deductibility of state and local taxes on federal tax returns. This unforeseen change in the federal tax code had the effect of turning what would have been a 58 percent increase in average state income tax payments among Massachusetts millionaires, from $160,786 to $254,355, into what is essentially a 147 percent increase when the federal SALT limitation is included in the calculation. This substantial change should be taken into consideration by voters when they contemplate approving the surtax proposal.