March 4, 2010

Tax Foundation Testifies on Maryland Tax Bills

House Ways and Means Committee Hearing Focuses on Inflation-Adjusted Income Tax Brackets, Treatment of Retirement Income, Estate Taxes and Property Tax Assessments

Washington, DC, March 4, 2010 -- Tax Foundation Economist Kail Padgitt, Ph.D., will address four pieces of legislation being considered by Maryland's House Ways and Means Committee at a hearing scheduled for 1 p.m. today:

  • HB 238, the Taxpayer Protection Act, would index state personal income tax brackets based on the annual change to the Consumer Price Index, creating stability within the tax code in terms of economic purchasing power and preventing "bracket creep."
  • HB 300, the Fairness in Taxation for Retirees Act, would equalize the way the tax code treats retirement income from pensions and non-pension plans.
  • HB 312, the Family Property Protection Act, would recouple Maryland's estate tax with increases in the federal estate tax exclusion, reducing compliance costs associated with the tax.
  • HB 366, the Homeowners' Property Tax Assessment Cap Reduction, would cap annual state property tax assessment increases at 5 percent instead of 10 percent, which would give a tax cut to people whose property appreciates rapidly.

Padgitt's full testimonies are available online: HB 238, HB 300, HB 312, HB 366.

"Maryland taxpayers have for years been hit by a hidden tax increase each year as inflation pushes them into higher tax brackets," Padgitt said. "The Taxpayer Protection Act would make sure Marylanders don't pay higher income taxes unless their purchasing power actually increases."

"Equalizing treatment of retirement accounts, as HB 300 does, would eliminate the distortive effects of tax incentives favoring pensions over other types of retirement income, and it would reduce tax code complexity as well," he said. "Meanwhile, recoupling Maryland's estate tax with increases in federal estate tax exclusions under the Family Property Protection Act would provide Marylanders the benefit of reduced compliance costs. Finally, lowering the cap on state property tax assessments under HB 366 would shift property tax burdened from people whose property values soar to people whose property values increase more modestly or fall."

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

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To schedule an interview, please contact Natasha Altamirano, the Tax Foundation's Manager of Media Relations, at (202) 464-5102 or naltamirano@taxfoundation.org.