Beacon Hill Weighs Potential Repeal of Estate Tax, sparking Debate Over Wealth Inequality
BOSTON – Massachusetts lawmakers are considering a potential repeal of the state’s estate tax, igniting a contentious debate over its impact on wealth distribution and state revenue. The move comes as state officials grapple with uncertainty surrounding future tax collections and budgetary priorities.
The estate tax, levied on taxable estates exceeding $2 million, currently generates approximately $300 million annually for the state, funds that support vital public services.Repealing the tax would primarily benefit the wealthiest families in massachusetts, while possibly exacerbating existing economic disparities. Advocates for repeal argue it drives wealthy residents to relocate, while opponents contend it’s a crucial tool for addressing wealth inequality and maintaining state funding.
MassBudget policy director Phineas baxandall cautioned against eliminating the tax, stating, “We don’t know how deep our revenue hole is. We know we need to be gearing up to double down on our priorities, not to be taking away our ability to invest in them.” He emphasized the estate tax as a mechanism for addressing wealth disparities between “the haves and the have-nots.”
Baxandall pointed to the recent success of the state’s income tax surcharge for high earners,implemented in 2023,which has exceeded revenue projections despite concerns about potential outmigration. “The lesson from that… is that wealthy families are smart enough to know they want to be in a place that invests in its future,” he said. “Eliminating a major tax like that… from the peopel who can most afford to pay it is exactly the wrong thing to do.”
The debate over the estate tax unfolds against a backdrop of broader discussions about the state’s fiscal health and the allocation of resources. Lawmakers are expected to continue weighing the potential economic consequences of repeal against the need for stable revenue streams and equitable tax policies.
