Gov. Parris N. Glendening joined legislative leaders yesterday in endorsing a move to reduce or eliminate the state's inheritance tax, making it almost certain that such a cut will be enacted during next year's General Assembly session.
The legislature's presiding officers said last week they support some cut in the inheritance tax but have not agreed on how much.
Glendening spokesman Michael Morrill said the governor would defer to legislators on structuring any such tax cut.
"The governor's very receptive to reducing, or eliminating, the inheritance tax," Morrill said. "He's happy to work with the legislature on that."
House Speaker Casper R. Taylor Jr. said he favors eliminating inheritance taxes for both spouses and descendants, which he said would put millions of dollars a year in taxpayers' pockets, and would make Maryland a more attractive state to live in.
"We're going to pass the [repeal], I'm sure of that, and I had every reason to believe the governor would not veto it," Taylor said. "I think it's a very positive step for us to take."
Taylor, a Western Maryland Democrat, said he would like to eliminate the inheritance tax in a single year. He said there is no reason to phase it out given Maryland's robust economy and the state's huge budget surplus.
Senate President Thomas V. Mike Miller Jr. said he wants to eliminate inheritance taxes paid by a surviving spouse, but wants to review the financial impact of doing so for all descendants.
"Maryland is one of only a very few states that continues to tax a spouse after the death [of their partner]," said Miller, a Prince George's County Democrat. "It's a very unfair tax when you consider that marriage is a partnership."
Miller said eliminating inheritance taxes for spouses would cost the state treasury only "a few million dollars a year," but the figure goes up considerably when children are included.
Legislative analysts this week put the cost of eliminating the inheritance tax at more than $51 million a year.
"We need to see how long this economic boomlet is going to continue and make sure we don't do any damage to the long-term fiscal health of the state," Miller said. "It's something we can consider."
While they support some cut in the inheritance tax, the governor and the General Assembly's leaders agree there should be no cuts in the state income tax beyond the 10 percent reduction enacted in 1997.
That cut is to be fully phased in by 2002.