One of a series of weekly commentaries from Harford County state legislators regarding the 2018 Maryland General Assembly session.
The last time Americans saw a comprehensive tax overhaul was in 1986 during the Reagan Administration.
Thanks to the Tax Cuts and Jobs Act signed by President Trump last month, more than 90% of workers will have bigger paychecks. So far, over 220 companies have announced pay increases, bonuses, or 401(k) match increases for workers. A typical family of four earning $73,000 per year will see a tax cut of more than $2,000. The GOP-led effort lowered tax rates across the board, eliminated special-interest tax breaks, modernized our international tax system, and lowered the corporate tax rate.
Many corporations are passing along tax savings. Right here in Maryland, BGE will be reducing utility rates for its customers as a direct result of their tax savings. No one expected within weeks of passing this historic tax reform millions of Americans would win this big with higher paychecks and lower monthly bills.
Not a single Democrat voted for this tax relief. U.S. House Speaker Nancy Pelosi’s response and defense of this fact was to call the $1,000 employee bonuses “crumbs.” DC Democrats don’t believe that tax cuts work even though history and economics prove they do.
The old federal tax system gave high-tax states, like Maryland, an advantage by allowing taxpayers to deduct their high income and property taxes. The Tax Cuts and Jobs Act set a fair playing field for states by allowing the first $10,000 in property and state income tax deductibility. This is putting pressure on the General Assembly to offset a potential Maryland income tax increase, especially on high earners.
We need tax reform in Maryland, too. If we do not act, Marylanders will see a state income tax increase of more than $550 million.
As a leader in the House of Delegates Republican Caucus, I am working on a GOP-lead measure to cut the Maryland income tax rates across the board and also allow taxpayers to choose to itemize their state income taxes even if they do not itemize their federal taxes. This will ensure that middle class families keep their federal tax savings instead of losing it to the State of Maryland.
On the other hand, Democrats in Annapolis can hardly wait to spend your money. Under the guise of education funding they’ve proposed the creation of a fake charity run by the State of Maryland. Not only is this dishonest and insulting to real charities, the federal government will never approve of a state-run charity for people to launder their property taxes for a federal tax write-off.
It’s also important to keep in mind that quite often this promised education funding never really materializes. When the lottery was introduced, it was for education; who can forget “slots for tots,” and how the gambling expansion was to fund education?
This scheme is an attempt to game the system for high-income earners with high property and income taxes. The very politicians who have championed progressive taxation are now trying to make state taxes better for the rich people in places like Montgomery County. The truth is that out migrations to lower tax states like Florida and the Carolinas will continue if Maryland does not act. Those states have already attracted almost $10 billion in personal income from former Marylanders who have moved away.
Thanks to Governor Larry Hogan, Maryland’s budget is turning around as we are working together to rein in spending. In three short years, we have cut almost $700 million in taxes and fees.
Thanks to Congressman Andy Harris, the only Maryland representative to vote for the federal tax reform package, hardworking Maryland families will see bigger paychecks, bonuses, and lower utility bills.
Thanks to President Trump for his leadership in getting the historic tax reform package passed, cutting regulations, and putting America first in trade and negotiations. The stock market is soaring and setting records and unemployment is at its lowest in decades; he is truly making America great again.
You can count on me to continue to fight for you and your family in Annapolis. Reducing Maryland’s income tax rates is the Fair, Simple and Honest way to ensure that Marylanders get to keep the full benefits of the tax cuts they are seeing from Washington, D.C.