Amid large state fiscal challenges, progressive groups and lawmakers are hoping to pass a variety of tax reforms. Once fully phased in, the yet-to-be introduced bill would raise $1.6 billion for the state general fund annually which could potentially offset the large projected budget deficits. Additionally, this increased tax revenue could pay for tax credits for some low-income earners.
Some proposed tax changes found in a pamphlet issued by the group include:
- A 7% tax increase on people whose income is $1 million a year or more. The tax increase would generate an estimated $419 million annually.
- Reverse a 2014 estate tax exemption and reinstate a $2 million exemption. The change would generate an estimated $84 million annually.
- “Significantly increase” the number of state tax auditors. The group, using IRS estimates on under-reported taxes, said Maryland likely loses $3 billion annually in unpaid taxes.
- Add a 1% surcharge on capital gains, generating an estimated $157 million annually.
“We know what works to build a vibrant economy: a well-educated workforce, which starts with good public schools; transit and road networks that help people and goods get to their jobs and to market; communities with affordable housing options so that people of all income levels can live where they work; affordable childcare so that parents can fully participate in the workforce; and families having enough money to afford what they need,” said Benjamin Orr, president and CEO of the Maryland Center on Economic Policy.
Maryland is currently facing some very serious budget deficit issues. Next year, the deficit is projected to reach $1 billion. In fiscal 2027, the last year of Moore’s term, it would grow to $1.3 billion. Projections indicate the budget deficit could be the highest since the Great Recession.
