BOSTON (AP) — Here’s a breakdown of Gov. Deval Patrick’s proposal to overhaul the state’s tax code.
— Income Tax: Patrick’s plan would hike the state income tax a full percentage point from 5.25 percent to 6.25 percent while doubling the personal exemption for all taxpayers and eliminating dozens of itemized deductions.
Patrick said the changes would pull in an additional $2.8 billion in revenues each year.
— Sales Tax: Patrick’s plan would reduce the state sales tax from the current 6.25 percent to 4.5 percent. Patrick argued that sales taxes tend to have a disproportionately bigger impact on lower and middle income residents.
Patrick said the changes would end up costing the state about $1.1 billion each year.
— Corporate Income: Patrick’s plan would eliminate some corporate deductions and special classifications.
Patrick said the changes would generate an additional $194 million each year in taxes.
Patrick said the net revenue from all the changes translates into an additional $1.9 billion in tax dollars each year, money he wants to spend on overhauling the state’s transportation system and improving access to education.