Repeal The Death Tax

By Bob Katzen

Senator Patrick O’Connor (R-Weymouth) has filed a proposal that would repeal Massachusetts’ estate tax, also known as the death tax — a tax on the value of a decedent’s estate before distribution to any beneficiary. Most Republicans are against the tax and coined the name death tax to imply that the government taxes you even after you die. Most Democrats support the tax and call it an estate tax to imply that this tax is only paid by the wealthy.

The first $1 million is exempt from this tax and the tax on anything over $1 million is a graduated one that according to the Department of Revenue’s website ranges from .8 percent to 16 percent.

Repeal supporters said this regressive tax is unfair and noted that Massachusetts is losing many residents, who move to Florida and other states where this tax does not exist.

Repeal opponents said the tax is a fair one and argued the state cannot afford the revenue loss.

“Massachusetts is one of only 14 states that have adopted an estate tax on top of the federal estate tax,” O’Connor said. “While the threshold for an individual at the federal level is $11.4 million, in Massachusetts it is just $1 million. With real estate assessment values rapidly increasing in the commonwealth, more and more families are being affected by this. I don’t want families that have lived here for decades to have to consider moving elsewhere because of an outdated tax law.”

“I’m against repeal because it would make our tax system less progressive and less adequate,” said Sen. Pat Jehlen (D-Somerville). “The estate tax is one of our most progressive: only the top 2 to 3 percent of estates, those with over $1 million in assets after deductions, and not including those where the spouse inherits, pay the estate tax, and it’s a graduated tax. Estates of $1 million pay 0.8 percent. We can’t afford to lose the $350 million to $450 million a year the estate tax brings in. We need to repair and improve our transportation, to give all our children an adequate education, and to pay enough to attract and keep child care and elder care workers into important and fast-growing jobs.”

“As one of only a dozen states in the nation still imposing an estate tax on the heirs of its deceased citizens, not even indexed for inflation since it was imposed in 2001, only Massachusetts and Oregon trigger its imposition at just $1 million of lifetime assets,” said Chip Ford, executive director of Citizens for Limited Taxation, which provided testimony to the committee. “Only Massachusetts reaches back and taxes on the first cent when that million dollar threshold is crossed. Long ago Benjamin Franklin noted, ‘In this world nothing can be said to be certain, except death and taxes,'” Ford added. “The Massachusetts Legislature in its insatiable pursuit of revenue, pushes that certainty to the limits, and beyond.”

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