Massachusetts — and especially parts of the Cape and Islands — has a "snowbird" problem.

Residents of locales like Nantucket alerted their legislators that, thanks to a prohibitive estate tax that kicks in at $1 million in assets, neighbors are jetting off to warmer weather states like Florida, which does not have an estate tax, for just over half the year, leaving the burdensome tax behind.

With the pandemic pushing housing prices sky high in the Bay State, some legislators argue that reform is even more important now.

"If you're a middle class family who's just sitting on property, the valuation has just increased," said state Sen. Julian Cyr, D-Truro, who authored the Senate version of the bill. "Those are the folks who're being adversely affected by the state tax, not the ultra-rich, who frankly are savvy and well-resourced enough to avoid it in the first place."

According to Zillow, the average Massachusetts home costs $541,834, a 16.6% increase from a year ago. "That means that a lot of middle-income families really quickly hit that $1 million threshold," said State Rep. Daniel Fernandes, D-Falmouth, who filed the House version of the bill. "If they just have a home that is slightly over half a million dollars, and they have some money in a 401k and maybe a car and a life insurance policy."

As it stands, Oregon and Massachusetts have the lowest threshold for estate taxes, at $1 million, according to the Tax Foundation. Only 12 states total, plus Washington, D.C., impose an estate tax at all.

The bill would double the threshold from $1 million to $2 million, bringing Mass. closer in line with Washington state and raising the threshold above Rhode Island's $1.6 million.

Cyr said that the bill would still make the state "revenue neutral" by making the tax progressive, similar to the system in place in New York state.

"The estate tax in Massachusetts was always intended to be a rather progressive tax, meaning that you're focusing on folks who are wealthy and super-wealthy, but I think that the million dollar threshold feels out of date," Cyr said.

Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, noted that the risk of losing the state's aging population to other states like Florida and New Hampshire already has a ripple effect on the state's other revenues, including capital gains taxes, interest, dividends, sales tax and more. The Herald reported earlier this year that the state lost $20.7 billion in adjusted gross income between 1993 and 2018.

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