(Alexandria, VA) -- Yesterday, the Maryland General Assembly passed legislation that would offer relief to taxpayers by gradually bringing the state’s estate tax exemption in line with the Federal government’s. This move is the latest in a trend of bi-partisan action to curb the burden of the estate tax or “death tax” as it is commonly known, and shows the time for ending this onerous levy is at hand, according to the 362,000-member National Taxpayer’s Union (NTU).
“Maryland’s welcome action to limit the death tax’s burden on her citizens is the latest highlight in the trend of both blue and red states addressing the outdated and burdensome tax,” said Lee Schalk. “Now is the time for more states, and the federal government to move towards more relief and eventually repeal.”
This is now a trend. In New York Governor Cuomo’s budget calls for the same phasing toward the federal exemption. Minnesota Governor Mark Dayton is proposing doubling his state’s exemption. Even Washington, D.C. is considering matching the federal exemption. Red states with inheritance taxes should heed this wakeup call by following in the footsteps of North Carolina, where lawmakers repealed the estate tax last year.
Schalk concluded, “It may be no coincidence that Presidential hopefuls like Martin O’Malley in Maryland, or Andrew Cuomo in New York, are open to reform now, but this further shows death tax relief is the middle ground, and bipartisan interests can come together on this issue.”
During this time of prolonged economic uncertainty and high unemployment, Maryland has taken an important first step to help grow small businesses and preserve jobs.
As a tax on capital and entrepreneurship the death tax slows business activity, destroys jobs, and suppresses wages. It also forces many families to sell , or downsize, small businesses and farms passed down through generations because they do not have liquid assets to pay the substantial price tag the federal government has placed on inheritance.
National Taxpayers Union has long supported estate tax repeal at the federal and state levels, most recently endorsing the Death Tax Repeal Act (S. 1183 and H.R. 2429) in 2013. A study by former Congressional Budget Office Director Douglas Holtz-Eakin found that full repeal would create 1.5 million jobs, expand investment by 3 percent, and increase small business capital by more than $1.6 trillion.