By Bob Katzen
The Revenue Committee will hold a virtual hearing on January 12, 2022 on separate bills sponsored by Sens. Ryan Fattman (R-Sutton) and Patrick O’Connor (R-Weymouth) that would abolish the tax that the estate of a person with assets of more than $1 million is required to pay following their death before distribution to any beneficiary.
The first $1 million is exempt from this tax and the tax on anything over $1 million is a graduated one that ranges from .8 percent to 16 percent. This tax applies to the entire estate value, not just the portion above the million-dollar mark. 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 threshold for the estate tax in Massachusetts is much lower than what is already taxed at the federal level — $1 million compared to $12 million federally,” said Fattman. “This year, for the first time in history, the average home price in Massachusetts is over $500,000. Since the estate tax is a transfer tax on the value of a decedent’s estate before the distribution to any beneficiaries, and when you factor in a house that would sell for over $500,000 plus additional assets, that threshold becomes very easy to reach. This creates a financial burden on people that may not have the means to pay the tax bill.”
“Massachusetts is one of just a handful of states that administer an estate tax in addition to the federal estate tax. While the threshold for an individual at the federal level is $12.06 million, in Massachusetts it is just $1 million,” said O’Connor. “I don’t believe families that have called Massachusetts home for their entire life should need to consider moving elsewhere because of an outdated tax law.”