Democratic Legislators Offer Tax Relief Proposals

By Bruce DePuyt

Democratic legislators unveiled a plan Tuesday to shield Maryland residents from impacts of the recently approved changes in federal tax law, vowing to protect middle-income taxpayers from a measure they say benefits the already well-off.

Mike Miller

Senate President Thomas V. Mike Miller Jr. speaks at a news conference Tuesday where state Democrats unveiled a package of bills they say will offer tax relief to many Marylanders in the wake of changes in the federal tax law. Photo by Bruce DePuyt

House Speaker Michael E. Busch (D-Anne Arundel) and Senate President Thomas V. Mike Miller Jr. (D-Calvert) unveiled their proposals at a news conference attended by dozens of legislators — many of them bill sponsors and committee chairmen who will oversee the measures as they work their way through the General Assembly.

“At the end of the session, we’re going to have a solution to benefit the people of the state of Maryland,” Busch said.

The package of Democratic bills would:

  • Restore, at the state level, the personal exemptions that were eliminated at the federal level.
  • Decouple Maryland’s estate tax from the federal levy, so that the portion of inheritance remaining tax-free remains $5 million.  (New federal law bumps the exemption to $10 million).
  • Explore the possibility of allowing taxpayers to deduct contributions made to the state’s schools, to lower their tax liability.

“The Republican tax bill would raise taxes on 92 percent of Maryland families, by over a billion dollars,” said Sen. James C. Rosapepe (D-Prince George’s), one of the bill’s sponsors. “[Our bills] stop that. If you’re rich enough to inherit tens of millions of dollars, you’re going to have to pay taxes on it.”

Democrats’ efforts will mitigate “some but not enough” of the impact of the federal bill, said Del. C. William Frick Jr. (D-Montgomery). “Restoring the personal exemption will be meaningful for a lot of people. There’s a lot of moving parts with the federal bill, and we can’t tackle all of it.”

Asked about lawmakers’ package of bills, Gov. Larry Hogan (R) told reporters, “We’re thrilled that they’re talking about this. I had conversations with the president of the Senate and the speaker of the House as early as a week ago, and they were saying ‘we need all of that revenue.’ So the fact that they now agree with me that we need to protect taxpayers, I’m ready to throw a party.”

“I can tell you they weren’t there a week ago,” he said.

Lawmakers conceded they have yet to determine the full impact of the changes triggered by the changes in federal tax law. Nor does the package of bills unveiled Tuesday address every concern that lawmakers have. “[Federal lawmakers] were hand-writing amendments on the floor of the Senate to get it done,” said Sen. Richard S. Madaleno (D-Montgomery), a candidate for governor. “We will spend years trying to figure out what the impact is. And we will be discovering where a comma was inadvertently left off and a new loophole popped up.”

In addition, Madaleno, vice chairman of the Senate Budget and Taxation Committee, said, “This measure totally changes and destabilizes our forecast for revenues.”

Busch said lawmakers are consulting with U.S. Sen. Ben Cardin’s (D-Md.) office, outside tax experts and leaders of others states to determine how to more fully respond to the changes in the federal tax code.

Miller said Maryland Attorney General Brian E. Frosh (D)  is looking at whether “blue” states like Maryland that are negatively impact by the changes could bring a lawsuit against the federal government.

One comment

  • Regarding the bit about allowing taxpayers to deduct contributions made to the state’s schools, I wonder whether this is about providing even more aid than already to non-public schools. How many taxpayers are making voluntary financial contributions to the state’s public schools? If it is about aiding non-public schools, I am vehemently opposed to it. Those schools shouldn’t be getting the state aid that they’re already getting. What we really need to be doing with our tax laws in Maryland is making them more progressive (so that the rich people who can well afford to pay more do so and those who are not so rich pay either nothing or definitely not as much as the rich). I’d be in a middle income category (not middle class, which term I despise) and am not looking for special breaks out of this.

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