Craig proposes phase-out of state income tax

Republican gubernatorial candidate David R. Craig released a plan Tuesday would put Maryland on a "glide path" toward eliminating its state income tax while cutting total spending by a minimum of 3 percent a year.

Craig, who has been Harford County executive for the past decade, said such a move would stimulate economic growth and halt a loss of population to states with lower taxes.


"We must restore Maryland to the way it was and we need a governor who knows how to do it," he said. "By voting for David Craig in 2014, people will be voting for a pay raise for themselves."

Under Craig's plan, tax brackets would be lowered across the board to 4.25 percent as of 2016. Couples now pay a basic rate of 4.75 percent on most of their income. Wealthier Marylanders pay a higher percentage on a sliding scale that tops out at 5.5 percent on income above $300,000.

Craig said he would couple that with an increase in the personal exemption from $3,200 to $5,000. He said that will provide relief to middle-class that would help offset the face that the greatest benefits under his plan would go to the higher income brackets, which would see the highest percentage drop.

In the second phase, Craig said he will call for a further reduction to a maximum rate of 3 percent -- with a bump in the exemption to $6,000.

Craig said a third phase in his plan, which would come sometime in what he hopes will be his second term, would eliminate the tax entirely. He said his proposal would not affect county piggyback income taxes, which the state would continue to collect.

According to Craig, elimination of the income tax would put Maryland in the company of nine states that have no income tax, including Texas, Florida and Tennessee.

Craig left himself some wiggle room on the timing of the phase-out, saying he would monitor the effects of the tax and spending cuts on state revenue.

The proposal comes two days after a Baltimore Sun Poll showed Craig languishing in the Republican primary race with single-digit support despite seven months on the campaign trail. Craig's 7 percent showing lagged behind the performance of the newest candidate in the race, Ehrlich administration official Larry Hogan, who gained 13 percent support. About two-thirds of GOP voters were undecided.

Other candidates in the June 24 Republican primary were Del. Ron. George of Anne Arundel County and Charles County business executive Charles Lollar, both of whom trailed Craig.