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.