ANNAPOLIS — The Maryland General Assembly is advancing a set of tax-relief proposals for all income levels and to lure multistate businesses by cutting corporate income taxes.
The Senate Budget and Taxation Committee approved the bills Thursday to expand the Earned Income Tax Credit for poor families, as well as mild tax relief for middle- and high-income earners. The proposals emerged from the Augustine Commission, a workgroup organized by Democratic leaders to ascertain how best to improve the economic climate.
Republican Gov. Larry Hogan has offered similar proposals to lower Maryland’s income tax levels, which are among the highest in the country. Elected in 2014 on a tax-relief platform, he has argued that his surprise victory was a mandate to cut tolls, fees and taxes.
Earlier last week, the House Ways and Means Committee approved bills to expand EITC and prevent the state from double-taxing a corporation’s income earned and taxed overseas.
Supporters said such measures would attract businesses who avoid Maryland because of its high taxes, jump-start the economy and create jobs.
The bills are likely to pass in their respective chambers by Monday, the deadline for each chamber to pass bills and send them to the other chamber.
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Some lawmakers were more wary about the tax breaks, arguing they would give relief to the wealthy and would not sufficiently benefit the working poor.
Sen. Edward Kasemeyer, Howard Democrat and budget committee chairman, said they are trying to offer as many tax benefits as possible in a fiscally responsible manner.
“We wanted to do something in [higher-income and lower-income brackets], but then obviously everybody in the middle would not be receiving anything in terms of a benefit, so the committee ultimately decided that we felt everyone should receive some tax benefit,” Mr. Kasemeyer said.
The Senate legislation would offer $671 million in reductions over five years. The average person in the top four income brackets would see a 1 percent to 3 percent lower tax rate, but single taxpayers earning more than $100,000 and joint filers earning more than $150,000 would benefit most.
The Earned Income Tax Credit will accelerate and build on a planned expansion of the credit to individuals under age 25, including those without children. Mr. Hogan’s plan was similar, but would have applied only to working families with children.
The legislature also has moved on several other bills:
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• The Senate plans to approve a bill to revamp the criminal justice system. The proposal emphasizes drug treatment and rehabilitation for possession charges rather than prison, and scales back mandatory minimums and harsh sentences for drug-related offenses as part of a sweeping “justice reinvestment” to reduce incarceration rates without sacrificing public safety.
• The Senate will vote on a bill to prevent unmanned aerial vehicles from flying over private residences and taking pictures to determine property tax rates. Advocates say drones are more effective in reaching properties that human workers don’t have the time or ability to get to; opponents say it is a privacy issue. Sen. Roger Manno, Montgomery Democrat, said the bill will not prevent Google Earth and other mapping technologies from using satellite technology.
• Bills to reinvest in troubled Baltimore neighborhoods have been up for votes in both chambers. One would keep Baltimore public libraries open 12 hours a day, seven days a week, and another would fund after-school and summer classes to keep children occupied. Two others would allocate money for demolition projects and to revitalize downtrodden areas by attracting businesses and universities to settle there.