State lawmakers from Frederick County are laying the groundwork for an all-out attack on taxes during the 2014 session of the Maryland General Assembly.

Sen. David Brinkley is looking to reduce the corporate income tax rate and adjust the Maryland estate tax. Delegate Michael Hough wants to require a supermajority vote for any tax increases. And Delegate Kathy Afzali is looking to ease the estate tax burden on family businesses.

Several of these proposals have fizzled in past legislative sessions, but Brinkley, R-District 4, said bringing them back will continue the discussion about tax relief.

“At least they can be conversation starters,” he said.

The process of crafting legislation for the year is already underway. Earlier this month, state senators and delegates had to decide if they wanted to draft any bills to be pre-filed before the Jan. 8 start of session.

Hough’s tax proposal will be one of his pre-filed bills and is part of a package of four measures focused on reforming state government. Burdensome taxes are one of the largest complaints Marylanders have about their government, so Hough, R-District 3B, is calling for a constitutional amendment that would make it more difficult to enact increases. With his proposal, raising taxes would require support from at least two-thirds of the state Legislature.

As is, lawmakers from the state’s largest jurisdictions can almost single-handedly approve tax increases that benefit their constituencies, he said.

“People are wising up to the fact that Western Maryland is becoming an ATM for Montgomery County and Baltimore city to balance their budgets,” Hough said.

One of Brinkley’s proposals would reduce the corporate income tax rate in Maryland from 8.25 percent to 6 percent, bringing it in line with Virginia’s rate. Another would match the state’s estate tax exemptions with those used by the federal government. The state now excludes only the first $1 million from the estate tax, while the federal government exempts more than $5 million, he said.

Afzali is also taking aim at estate taxes. In past sessions, she has worked to provide estate tax exemptions for family-owned farms, and this year she is turning her attention to family-owned businesses.

“I’m just chipping away at the block,” she said.

Her proposal would exempt up to $5 million of family-owned business property from estate taxes, with a 5 percent tax rate on property above that threshold. She offered a similar proposal last session, and lawmakers opted to study the idea over the interim.

Afzali, R-District 4A, said families are often forced to sell businesses after the death of a relative because they can’t afford to pay the estate taxes. Easing the tax burden could allow more of these small enterprises to stay in families, she said.

The estate tax bill is being drafted but will not be filed before the session begins, Afzali said.

Delegate Galen Clagett is working on a pre-filed bill to create an ombudsman position to advocate for businesses. The ombudsman would act as a “troubleshooter” inside the Maryland governor’s office and hear appeals from businesses that are having problems with state agencies, said Clagett, D-District 3A.

The proposed post would come with “the authority to bring the hammer down on these agencies that are slowing down the process,” Clagett said. “We need to put systems and people in place to change the culture.”

State agencies should be more business-friendly and look for ways to help rather than hinder enterprise in the state, he added.

Follow Bethany Rodgers on Twitter: @BethRodgersFNP.

(31) comments

watson4sherlock

The private ownership of property is not an inalienable right.

watson4sherlock

In perfect competition profit tends to zero (0) but corporate profits are at an all time high. Profit is not the promise of capitalism; no profit is the promise of capitalism.

The only thing eliminating corporate income tax does is take wealth from the 99% and give it to the 1%.

Delaware is a tax haven but corporations don't put their offices there. They just incorporate there and register as foreign corporations in other states.

You can pay corporate welfare to get corporations into your state but that doesn't mean they are going to stay because next year Texas will other then more corporate welfare to move there.

Earlier this year, the Government Accountability Office, a federal agency, examined corporate tax returns to determine the taxes corporations actually pay. It found that in 2010, profitable corporations based in the United States had an effective federal tax rate of 13 percent on their worldwide income, 17 percent including state and local taxes.

See http://economix.blogs.nytimes.com/2013/11/26/effective-corporate-tax-rates/?_r=0

darththevader

What kind of warped logic is that? How is that taking wealth from anyone? A consumer has to spend the money on a product or service for a corporation to get it.

Ehat's wrong with profit? It's good. Guess where everyone's retirement is

watson4sherlock

If you believe capitalism is desirable then you have to accept that the basis of capitalism is there is no profit. Profit comes from something that is less than perfect competition. I guess you have never studied economics.

kjswartz

I know I lose more of my wealth paying taxes towards corporate wealth-fare. But what Watson says makes sense - like our current cable company. There's plenty of competition; we've got Comcast basic, Comcast premium, Comcast bundled with Internet, Comcast bundled with Phone, and Comcast bundled with Phone and Internet. Oh yeah, Comcast Premium with phone and Internet.

Comcast is a very profitable corporation; where's their competition, and when last did you place the county contract up for competitive bidding? Oh yeah, that's right - profit, in every case, is good.

Gordon Gekko

nbouqu1

“People are wising up to the fact that Western Maryland is becoming an ATM for Montgomery County and Baltimore city to balance their budgets,” Hough said.

and the stupidest statement of the day award goes to Delegate Michael Hough.

Let's take the most populous and richest of the Western MD counties as an example,

Frederick County, pop (2010 census): 233,385, median household income: $82,668

Montgomery County, pop (2010 census): 971,777 (FOUR times Frederick's), median household income: $92,213

and somehow we are to believe that Frederick is MoCo's ATM? Delegate Hough needs to stop bogarting whatever it is he's smoking, 'cause it's clearly the good stuff.

watson4sherlock

The five western Maryland states only have 8% of the assessable tax base.

See http://dls.state.md.us/data/polanasubare/polanasubare_intmatnpubadm/
polanasubare_intmatnpubadm_annrep/FINAL-County-Revenue-Outlook.pdf

MikeKuster

These do nothing to address Maryland's true tax inequalities. They are playing to their base and playing a pretty tune to lull the electorate. It all sounds just so reasonable to do these things, but does nothing to solve real problems. As usual, its easier to put on a show than to actually do something.

public-redux

I'd like to hear Afzali explain why she wants to create a class of people who would be entitled to a lower estate tax rate than people who aren't in that class. Does she not believe in equal protection under the law?

jerseygrl42

"bring down the hammer on those who slow the process"...be very careful what you ask for when it comes to brinkley and claggett...these two along with eliott,hogan and schulz sent a letter to MDE PRIOR TO the final public hearing on the incinerator asking mDE to hurry it up and approve the permits ....guess they feel the public comments would be of no use and only slowing down the process of wealth transfer...$3 Billion dollars worth from the taxpayers to wheelabrator, The Wasteful authority and a few others ...oh and 60 jobs for frederick...WOW that sounds like such a good deal and all the while they operator will be dumping 400,000 gallons of toxic water daiily into The Bay and millions of lbs of toxic particulate up the stack...its ALL about the MONEY

dmbc21

Why is it that the Republican's are always fighting to reduce the tax rates for corporations and the wealthy, but never for the middle class and poor.

darththevader

How do you reduce the tax rate on someone that doesn't pay taxes? What makes you think businesses are all wealthy?

dmbc21

Did you not see that I said corporations AND THE wealthy, not wealthy corporations?

darththevader

Same difference. You can't cut taxes on those that don't pay. Instead it's pile on the same people until they can't pay or leave

kjswartz

Ah, if only that were true.

Keep raising the fuel tax.
Keep raising the sales tax.
Keep reducing services to citizens
Keep reducing services to the poor

Start by having everyone pay their fair share.

watson4sherlock

Everyone who works, not matter how little they make, pays the same social security and medicare taxes except those who make over $117,000 stop paying social security taxes.

watson4sherlock

The higher income benefit from low prices of goods and services subsidized by tax payer money instead of paying the fair market price for what these goods and services should cost if labor was paid a fair wages and benefits.

You don't really think you are worth more than somebody else do you?

In 2012, the median earnings of women who worked full time, year-round ($37,791) was 77 percent of that for men working full time, year-round ($49,398) ─ not statistically different from the 2011 ratio. The female-to-male earnings ratio has not experienced a statistically significant annual increase since 2007.

The number of men working full time, year-round with earnings increased by 1.0 million between 2011 and 2012; the change for women was not statistically significant

See http://www.census.gov/newsroom/releases/archives/income_wealth/
cb13-165.html

fredneckian

As always, those that won the vaginal lottery are only looking out for their brothers.

darththevader

The nerve of some people providing for their kids instead of giving it all to the government so they can do it.

watson4sherlock

Private ownership of property is by consent of the people. That consent can be removed.

skjer531

our ,so-called lawmakers taking orders from ALEC

DebtFree

Brinkley has about much clout in Annapolis as an illegal has in the GOP. [smile]

formerfcps

Headline is very misleading. These Republicans are taking aim at the only taxes left the wealthy pay when they pay any at all.

darththevader

They are taxes on employers

kjswartz

Very good. Thanks for stating the obvious!
You and I both agree - employers must pay taxes to pay for the public services that they consume.

Ever think of running for public office?

darththevader

???

The problem isn't paying for public services they consume. The oroblem is paying for the public services taxburdens consume.

How is an employer supposed to grow (and employ more taxpayers) if the State keeps digging deeper into their pockets?

This is why businesses are leaving

kjswartz

But that is exactly what you are proposing - reduce the corporate tax burden and laying the burden at the feet of the poor and middle class families. A family calls police and expects rapid response. We paid for police, and it is a costly service.

But, if there's a break in that occurs at a home and a business simultaneously, who gets the earlier response? It's that level of public service that the private sector needs to pay for, and I'm not seeing they are paying their share.

But it doesn't stop there

What about the tax credits new business demand before relocating to Frederick County? Who pays for those tax credits? I don't see the other businesses stepping up to voluntarily pay those taxes. You've just dumped those tax credits (and the public services that they represent) at the feet of local citizens.

Fair tax has always been the way to go. Businesses must pay their share of public services. I'm not seeing it.

kjswartz

As for estate taxes on family business, proper planning would have bequeathed more than enough money to pay those taxes. How many comments have we heard that the poor should suffer because of wrong life choices?

darththevader

A lot of the estates are property, not cash. In order get the cash to pay the taxes the property must be sold. How much cash do you think farmers have? The wealth is in land and equipment.

kjswartz

And that means what? Poor planning still must be rewarded? Family farms already have the benefits of $1,000,000.00 exemption, and I am more than happy to "devalue" farmlands so that the entire exemption satisfies the estate taxes. If not, our legislators need to establish exception FOR FARMERS ONLY.

But, you meant to say, what about the family businesses?

Again, they need to account for the estate taxes. Poor planning is no excuse. If businesses consume public resources, they must pay for those public resources. Period.

Crustybachelor

"Several of these proposals have fizzled in past legislative sessions, but Brinkley, R-District 4, said bringing them back will continue the fizzle"

Welcome to the discussion.

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