Wednesday, February 21, 1996
income tax cut would mean 65,600 new jobs
-- A Weld administration proposal to reduce the Massachusetts personal
income tax rate from 5.95% to 5.45% would create 65,600 new jobs. It would
increase capital spending by about $4.8 billion and increase annual wages
of Massachusetts workers by an amount ranging from $2.2 to $3.2 billion.
This is the finding of the Beacon Hill Institute at Suffolk University.
cut is part of a proposal to downsize state government. The proposal
calls for the tax rate to go down to 5.70% on January 1, 1997 and to
5.45% on January 1, 1998.
by critics that the state would lose at least $500 million in tax revenue
as a result of the tax cut are unjustified. The Beacon Hill Institute
projects that the lower tax rate would cause employment and wages, and
thus the tax base, to expand. The actual tax revenue loss would be substantially
less, ranging from $328 to $382 million.
Hill Institute used its dynamic, econometric state tax-analysis model
to estimate the effects of the proposal.
Hill Institute conducts economic research on public policy issues affecting
Massachusetts citizens and businesses.
1/30/07 11:15 AM