The Honorable Anne R. Kaiser
Chair, Committee on Ways and Means
Maryland State House
Annapolis, MD 21401
Dear Chair Kaiser,
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, I write to express our support for two tax proposals currently before your committee. These pieces of legislation, HB 271 and HB 375 would deliver substantial tax relief to taxpayers, small businesses, and corporations headquartered in Maryland. Allowing Old Line State taxpayers to keep more of their hard earned money should be a top priority for lawmakers across the political spectrum. Enacting these measures would make Maryland a better place to start or expand a business, and promote a friendlier environment for overburdened taxpayers.
Gradually reducing the state corporate income tax rate from 8.25 to 6.25 percent, as it is written in HB 375, would make Maryland more economically competitive. Since the corporate tax rate is a significant factor in how businesses deploy capital, hire workers, and determine wages, it is essential for states to have a rate as low as possible. Evidence continues to mount that high business income taxes are damaging for economic growth. By gradually slashing Maryland’s uncompetitive rate by 25 percent, Maryland-based businesses will be able more effectively and foster economic growth across the state. According to data from the Tax Foundation, Maryland ranks as the 40th worst business climate out of 50 states. We believe adopting this corporate rate reduction will surely make Maryland a more competitive place for business and improve its ranking.
House Bill 271 will make it much easier for hundreds of thousands of taxpayers to file their taxes by more than doubling the state standard deduction from $2,250 to $6,000 for individuals and from $4,550 to $12,000 for joint filers. With the majority of Marylanders opting to take the standard deduction, totalling about 1.7 million taxpayers, HB 271 will be a direct tax cut for those choosing this option. To that end, this proposal will likely incentivize many taxpayers to choose this deduction over itemizing, saving taxpayers their time, and reducing their headaches. The state estimates this will save taxpayers more than $400 million in 2019, and $1.6 billion by 2024.
By implementing one of the boldest state tax relief plans in recent Maryland history, Marylanders would be given some much-deserved financial relief. The legislature made progress in 2018 by slightly raising the standard deduction. Now is the time to build on that important work by passing HB 271. We strongly urge the committee to report these bills out of committee and look forward to working with you to ensure their swift passage.
Sincerely,
Thomas Aiello
Policy and Government Affairs Associate