BOSTON — Tax code experts say Bay State taxpayers would feel the impact of the GOP’s proposed bill more than other states in some key ways.
The bad news first.
We could end up paying more in taxes with a proposed cap on property tax deduction at $10,000. Massachusetts pays some of the highest property taxes in the country.
People in 20 cities and towns across the state pay an average of over $10,000 per year in property taxes.
According to Boston Business Journal, those towns include Belmont, Weston, Manchester-by-the-Sea and Cohasset.
That ties back to the plan to keep a specific interest deduction only for existing mortgages and new purchases, and only with loans of $500,000 or less.
That's bad for home buyers.
Consider that when according to Zillow, the median home price is just under $900,000 in Newton and hovers just over $500,000 in Boston.
The big one is the proposed elimination of deductions for state income or sales taxes. That income tax is 5.1 percent here in Massachusetts.
“We have a relatively high state income tax rate, and other states like Connecticut, New York, or California are in a similar situation and so citizens in these states, including Massachusetts, will take quite a hit if that deduction goes away,” explained Tim Tierney, an adjunct professor at Bentley University. “If your deductions go away, then effectively you're paying more and so your rate effectively goes up."
There is some good news though.
The GOP plan doubles the standard deduction, which experts say could actually help low income households.
Cox Media Group