Mass. tax refund to do little to help lower income residents: Its expensive to be poor

Despite nearly $3 billion in excess revenues flowing back to taxpayers next month, Bay Staters are already hankering for more financial relief from Beacon Hill lawmakers.

MassLive readers, responding to a recent survey about the pending tax rebates triggered by a state law known as Chapter 62F, signaled more tax breaks are needed to withstand rising inflation and hefty utility bills this winter.

It wont lower expenses for the rest of my life, Connie Haynes, of Feeding Hills, said of the 62F tax refund. Prices rarely go down.

Eligible residents can expect to receive a rebate that is 13% of their 2021 state income tax liability, with the average amount at about $530, according to the Massachusetts Budget and Policy Center. But low-income households who do not pay income taxes will not get any refund under the tax cap law and the bottom 20% of earners will receive an average credit of just $9.

Taxpayers would have needed to earn more than $38,461 in 2021 to secure a refund of more than $250, according to the Massachusetts Taxpayers Foundation.Read more: Healey, Driscoll visit to Latino-owned businesses highlights huge economic engine in Mass.

Im going to spend my $23 back on groceries knowing how ridiculous it is that the richest people in this state are going to get millions back, Pat Murray, of Auburn, wrote in response to the MassLive survey. With rising inflation, the government should be taxing the rich to take excess money out of circulation, not trying to trigger a recession to raise unemployment.

Karen Ann, who will use the refund to pay back other taxes, said she wasnt sure whether this relief was sufficient. Still, she had a simple message for lawmakers: Lower taxes altogether.

Brit G., responding to the survey that her family needs additional money for food, more definitively said the tax refund does not go far enough.

Its expensive to be poor, she wrote. I want lawmakers to tax the rich as much as they tax us poor.

Some MassLive readers intend to put their refund into savings or pay outstanding bills.

Cindy Scaccia, for example, will earmark the money for a new car. But her suggestion to lawmakers about providing more assistance was scuttled again last week by the Senates top budget writer.

Stimulus checks would be great, Scaccia, of Worcester, responded to the MassLive survey. After all, they freely give themselves raises every year! They need to share the wealth!Read more: Expensive home sales could trigger millionaires tax, but data shows few in Worcester, Springfield would be impacted

In the final hours of formal sessions this summer, lawmakers abandoned their plan to deliver $1 billion in tax relief to residents including one-time $250 stimulus checks to middle-income households as they contended with affordability concerns raised by the prospect of simultaneously shipping out $3 billion as stipulated by the tax cap law. The package also included permanent tax code overhauls, including raising the earned income tax credit and the child and dependent care tax credit.

House Ways and Means Chairman Aaron Michlewitz said in mid-September that all possible tax relief measures were still on the table.

Its an option, but I just dont know. Its a little too early in the process to be more specific about that, Michlewitz had said.

But Senate Ways and Means Chairman Michael Rodrigues later offered more clarity on WBSMs SouthCoast Tonight.

Thats still yet to be determined; probably not, Rodrigues said. Because $3 billion worth of checks are going out.

Beyond stimulus checks, Mark Powell in the MassLive survey advocated for the Legislature to slash the sales and meals taxes back to 5% and to lower the personal tax rate. Dino Torchia, of Becket, likewise called for lower sales and income taxes.Read more: To qualify for Mass. tax refund, you need to meet this upcoming deadline

And Haynes urged Beacon Hill to lower the tax burden on retirees.

After saving for 50 years, I expect to lose 10% of my RMD (required minimum distribution) to Mass tax deduction so I wont have a big bill at tax time, Haynes said in the MassLive survey.

In the stalled tax relief package, lawmakers had proposed raising the senior circuit breaker, bumping the maximum from $750 to $1,755. The credit, aimed at seniors whose rent or property taxes exceed a certain portion of their yearly income, was estimated to impact more than 100,000 individuals for an annual cost of $60 million.