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Maryland Democrats outline response to federal tax overhaul

January 16, 2018

ANNAPOLIS, Md. (AP) — Maryland Democrats who control the General Assembly outlined plans on Tuesday to respond to the GOP federal tax overhaul.

Leading lawmakers emphasized that they are making it a priority this session to return hundreds of millions of dollars in state tax increases that they say are triggered by the federal law approved last month. While lawmakers are still working to understand the full ramifications of the federal law and its impact on the state, House Speaker Michael Busch, a Democrat, said the federal tax measure “takes away $680 million in exemptions for Marylanders.”

“This is our priority this year,” he said, with other leading Maryland Democrats standing by him at a news conference. “We want to get to work early.”

Sen. Edward Kasemeyer, a Baltimore County Democrat who chairs the Senate budget committee, said one measure would make it clear that Maryland residents could still claim personal exemptions at the state level that are believed to be lost under the federal law.

“It’s just maintaining what Marylanders currently can do on their tax forms,” Kasemeyer said.

Sen. James Rosapepe, a Democrat who represents parts of Anne Arundel and Prince George’s counties, said the bill is needed to avoid a billion-dollar tax increase in the state.

Del. Anne Kaiser, a Montgomery County Democrat who chairs the House Ways and Means Committee, said the plan will create new charitable deductions.

“By the federal government eliminating exemptions and deductions, everyone’s income is calculated to be higher, which means higher federal and state taxes, but our plan will save everyday Marylanders thousands of dollars and untie this great state from irresponsible federal tax policies,” Kaiser said.

Senate President Thomas V. Mike Miller, a Democrat, said about 360,000 Maryland residents “are going to be adversely affected by this bill.” He also said Maryland will watch what states such as New York, California and New Jersey, which also are hard hit by the new law, are doing in response.

“We’re going to work in concert with them, but also if all is not fully resolved by the end of the session we’re going to join them with our attorney general and their attorneys general in filing suit against the federal government for what is unfair to the state of Maryland,” Miller said.

Part of the plan would help pay for some of the lost tax revenue in the state by ending a tie between Maryland’s estate tax and the federal government’s estate tax. The federal exemption is set to double to about $11 million next year. Several years ago, Maryland tied the state’s estate tax to the federal government, but Democrats say the ballooning of the federal exemption makes it unaffordable for the state to continue doing that. The bill would freeze the exemption at $5 million in Maryland.

“We cannot afford this revenue loss,” said Del. James Tarlau, a Prince George’s County Democrat, who added the bill would save about $60 million a year. “We are going to need this revenue for schools, for mass transportation and for tax relief for our most vulnerable residents who are hurt by the adverse effects of the Republican tax plan.”

Gov. Larry Hogan, a Republican, also has pledged to submit tax-cut legislation to compensate after the federal measure eliminated the personal exemption.

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