SENATOR TARR BACKS WORKING
FAMILIES TAX CREDIT
Republican Policy Conference
Prioritizes Affordability
1/19/07
BOSTON-
Senate Assistant Minority Leader, Bruce Tarr (R-Gloucester)
and the members of the Republican Policy Conference are
sponsoring a comprehensive tax credit plan to make Massachusetts
more affordable for middle income families. The bill is to help
the Commonwealth’s many residents to cope with the State’s high
cost of living, and is a major priority of the conference, of
which Tarr is the Senate Chair.
“Too many
everyday costs of living are putting pressure on the working
families of our state. They need and deserve relief. Moreover,
the economic future of our state depends on people being able to
stay here and work here,” said Senator Tarr
The innovative
bill is known as the “Working Families Tax Credit,” the
legislation would allow taxpayers to claim up to $20,000 in
deductions on their state income tax return to offset a variety
of everyday living expenses, including rent, utilities, college
tuition and child care.
Under the GOP
proposal, taxpayers can choose one or more deductions from a
“checklist” of qualifying expenses. Deductions will range from
$500 for property or casualty insurance costs on a primary
residence to as much as $6,000 for mortgage expenses.
Collectively, the total deduction claimed by any taxpayer can
not exceed $20,000 in any given tax year.
“We tried to make
this plan as broad-based as possible so that more would qualify
for relief,” said Senate Minority Leader Richard R. Tisei
(R-Wakefield). “Depending on their personal circumstances, some
taxpayers will get a small credit, while others will be able to
claim the full deduction.”
“Until we make
Massachusetts more affordable, we will continue to see residents
pulling up stakes and moving to other parts of the country,”
said House Minority Leader Brad Jones (R-North Reading). “The
Working Families Tax Credit is a key component of our effort to
turn that trend around and keep people at home in the Bay
State.”
Republican Senate
and House members are now working together to develop new ideas
that will improve the lives of Massachusetts residents through
the newly created Republican Policy Conference that both Senator
Tarr and Representative Loscocco (R-Holliston) chair.
The tax credit is
one of several initiatives that Republicans are offering this
session to try to stop the exodus of residents from
Massachusetts. More than 250,000 people have left the state
over the last four years, due primarily to high housing and
insurance costs.
Highlights of the
Working Families Tax Credit legislation include:
∙ an expansion of the
existing rental deduction, which will increase from $3,000 to
$4,500;
∙ the introduction of a
new mortgage interest deduction for a primary residence, which
will be capped at $6,000;
∙ the creation of a $500
deduction for property or casualty insurance costs associated
with a primary residence;
∙ the establishment of a
$2,500 utility deduction, which will allow residents to offset
costly expenses such as water, sewer, electricity, home heating
oil, natural gas and propane;
∙ an increase in the
standard child care deduction, which for a single child will
rise from $4,800 to $5,520, and from $9,600 to $11,040 for
parents with two or more dependents; and
∙ an expanded student
loan interest deduction, which will now be available not only to
undergraduate students, but also graduate students pursuing an
advanced degree.
The tax credit
package also offers an additional benefit to parents sending a
child to college. Under current tax law, when a student is
enrolled in a two or four year college, parents can claim a
credit equal to the amount by which the tuition payments exceed
25 percent of their adjusted gross income. The new proposal
expands eligibility by allowing for the deduction of tuition
costs that exceed 15 percent of adjusted gross income.
Republican
legislators have been working closely with the Department of
Revenue to determine the fiscal impact the tax credit proposal
will have on the state.
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