If the law says they won't have to pay any tax by holding the asset for six years, then that's a reason to buy and hold onto the asset. Besides the negative consequences for individual investors, hiking the capital gains tax will have negative consequences for the Massachusetts economy. Finally, there's the matter of trust in government. Five years ago, the legislature got a substantial and controversial pay raise. The political justification was that taxpayers got, in return, a reduction in capital gains taxes, part of which the legislature now wants to rescind.
Most policy issues involve tradeoffs.
In the end, we hope there are more winners than losers. When it comes to this tax hike, there are no winners. It's a loser for low-income households, for the state economy and for the taxpayers who were betrayed by the legislature. No matter how worthy its motives, the legislature should find some other way to raise new revenue. This triple loser should strike out.