Maryland will enjoy more than $3 billion in annual tax relief due to landmark tax reform that is poised to pass Congress this week, according to a new report from the Maryland Public Policy Institute. However, some Marylanders – especially those living in the wealthy suburbs of Washington, D.C. - may end up paying more in federal taxes. The full report is available at mdpolicy.org.
“Putting more take-home pay in the hands of Marylanders should always be the priority when it comes to tax reform,” said Christopher B. Summers, president and chief executive officer of the Institute. “Many Maryland families and entrepreneurs will benefit from this plan, but others will find a lump of coal in their tax stocking this holiday season. No Marylander should face higher tax burdens, so we encourage state and local leaders to consider tax reductions that offset changes to state and local tax deductions at the federal level.”
The report, authored by tax policy expert Daniel J. Mitchell, Ph.D., offers a fresh take of the tax plan’s highlights, including lower corporate tax rates, lower personal tax rates, small business tax reductions, and a lowering of state and local tax deductions.
It also shows that Maryland’s Washington suburbs will be particularly hard hit by a provision to limit state and local tax deductions to $10,000. Indeed, four of Maryland’s eight congressional districts will be among the 20 hardest hit in the nation by this change. The Institute encourages Maryland policymakers to reduce state and local tax rates in response to the new limit on the state and local tax deduction.
According to a Tax Foundation estimate, the reforms should also result in more than 17,000 additional jobs in Maryland. Further, middle-income families in the state will enjoy more take-home pay—an annual increase of $3,200 by the 10th year—thanks to a combination of faster growth and lower taxes
To read the full report visit: mdpolicy.org
About the Maryland Public Policy Institute: Founded in 2001, theMaryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society. Learn more at mdpolicy.org.
