Democratic Massachusetts Governor Wants to Cut Taxes to Stem Exodus
(Bloomberg) -- Massachusetts Governor Maura Healey said she’s prioritizing tax cuts and housing construction to stem an outflow of people and their incomes from the New England state.
“I want people to stay in Massachusetts; I want businesses to stay in Massachusetts,” Healey, a first-term Democrat, said in an interview on Bloomberg Radio’s Baystate Business on Thursday.
The state lost almost 48,000 people by mid-2022 from two years before, according to Census Bureau estimates, spurring concern about outmigration that will curb long-term economic growth. Some $4.3 billion of income left the state in 2021, the Pioneer Institute, a pro-free-market research group, recently estimated after analyzing Internal Revenue Service data.
Healey, who took office in January, quickly revived attempts to enact a package of tax reductions after her Republican predecessor Charlie Baker was unable to win the approval in the Democratic-controlled legislature.
Among the reforms Healey is pushing: a reduction in the short-term capital gains tax rate to 5% from 12%, a level that is now an outlier along states, she said. Healey also wants to boost the threshold for the estate tax to $3 million from $1 million.
The governor also said she’s working to overhaul the regulatory permitting process to help encourage affordable housing. This spring, tens of thousands of students will graduate from the state’s top educational institutions, and the goal is to encourage them to stay, she said.
“We need to make life more affordable for residents, and we need to get rid of some of those things that have made Massachusetts an outlier,” she said.
Healey’s push for an affordable housing program won’t be easy if neighboring New York state is any guide. Governor Kathy Hochul last month was forced to scrap plans to address New York’s critical housing shortage after running into a wall of opposition from small-town legislators.
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