, Salem, MA


April 10, 2013

Column: Tax changes in governor’s plan could hurt, not help

As attention focuses on the merits of the administration’s $1.9 billion tax plan versus the Legislature’s more modest package, I am troubled by the dearth of discussion about Gov. Deval Patrick’s proposed major structural changes to the state tax code. I have been a CPA specializing in tax for nearly three decades, so while evaluating this proposal, my frame of reference goes well beyond my time in the Legislature. In the governor’s quest to raise nearly $2 billion in revenue while simultaneously restructuring the tax code, I fear we will be left with a tax code that is flat as a pancake and devoid of deductions that help those most in need.

Some specifics:

Deductions and exemptions

The governor’s proposal eliminates a long list of deductions that families rely upon. Not only do these deductions lend a level of progressivity (in both the tax and political sense) to the tax code, but they also encourage people to do important things that improve the lives of so many in the commonwealth. Modest deductions for those who adopt children, become foster families, use day care in order to work, go to college and send children to college, have children under 12 — are all being eliminated. The list of 44 deductions is quite comprehensive and also includes lead paint removal, septic systems, commuters, renewable energy, many employer-provided benefits, scholarships and fellowships. In addition to incentivizing important activities, these deductions also provide a small measure of assistance to those who need it most. Why discard this long list of good ideas?

The personal residence deduction

As the beleaguered real estate market is showing signs of recovery, now is not the time to eliminate the partial exemption on the profit from the sale of personal residences that matches the federal exemption. Removing this deduction will hit retirees particularly hard, since gains in the real estate market tend to be with those who have held on to their houses for a very long time.

Text Only | Photo Reprints

AP Video
Arizona Prison Chief: Execution Wasn't Botched Calif. Police Investigate Peacock Shooting Death Raw: Protesters, Soldiers Clash in West Bank Police: Doctor Who Shot Gunman 'Saved Lives' 'Modern Family' Star on Gay Athletes Coming Out MN Twins Debut Beer Vending Machine DA: Pa. Doctor Fired Back at Hospital Gunman Raw: Iowa Police Dash Cam Shows Wild Chase Obama Seeks Limits on US Company Mergers Abroad Large Family to Share NJ Lottery Winnings U.S. Flights to Israel Resume After Ban Lifted Official: Air Algerie Flight 'probably Crashed' TSA Administrator on Politics and Flight Bans Raw: National Guard Helps Battle WA Wildfires Raw: Ukraine's Donetsk Residents Flee Senators Push to End Hamas Threat in Cease-Fire A Young Victim's Premonition, Hug Before MH17 Raw: Deadly Storm Hits Virginia Campground Death Penalty Expert: 'This is a Turning Point' Raw: MH17 Victim's Bodies Arrive in Netherlands
Comments Tracker
Roll Call
Helium debate