(BOSTON) –On January 1, the Massachusetts income tax will fall from 5.15% to 5.1% thanks to a law written by Norwood Democrat John H. Rogers. The law requires an income tax rollback of .05 percent when triggered by certain positive economic benchmarks. The last time this occurred was in January of 2015 when the income tax rate was reduced from 5.2 % to 5.15 %.
A gradual reduction in the state income tax was first penned into law in 2000, when Massachusetts voters approved a ballot question to gradually lower the income tax rate from 5.95% to 5%, but in 2002, due to a major recession, the Legislature froze the rate at 5.3%.
“The 9/11 Recession precipitated a $2.5 Billion deficit—the largest, steepest revenue loss in state history,” explains Rogers, the former chairman of the House Committee on Ways and Means. “To stabilize the state’s budget and minimize the dramatic impact to education, local aid, public safety, and services for our seniors and veterans, it was imperative to cut $3 Billion in other spending, transfer $2 Billion from the Rainy Day account, and raise $1.2 Billion in revenues.”
“Part of that revenue enhancement package” Rogers said, “was freezing the income tax rollback at 5.3 percent, then rolling the rate back to 5.0% as the economy improves, triggered by indices of economic recovery.”
Rogers’ income tax rollback was passed by the full House and was adopted by the Senate, without amendment, vetoed by Acting Governor Swift, and then overridden by both branches to become law.
“Every time it’s triggered, this law makes good on a promise to voters” said Rogers, further adding “the tax reduction is estimated to save public and private employees who work in Massachusetts roughly $152 Million throughout the New Year”
“ A tax cut for all Massachusetts workers of $152 Million should make for a very Merry Christmas since it is, in effect, a $152 Million pay raise for all of our working families.”
A further income tax rate reduction to 5.05% will go into effect next January as the state’s economy continues to improve.