Article: CAPITAL GAINS CHANGE COULD HIT THE HARDEST

[A PUBLISHED CORRECTION HAS BEEN ADDED TO THIS STORY.]For Massachusetts homeowners, investors, and entrepreneurs, a House- approved overhaul of the state's capital gains tax could prove to be a much bigger pocketbook issue than freezing the income tax rate at 5.3 percent, analysts said yesterday.

The House approved a $1.06 billion package of tax increases in an effort to close a budget shortfall for the 2003 fiscal year, which begins July 1. The legislation would freeze the voter-approved income tax rollback, raise taxes on cigarettes and capital gains, do away with charitable deductions, and reduce the personal exemption.

Roughly 40 percent of Massachusetts taxpayers, pay capital gains ...

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