Wednesday, March 16, 2011
Senate Committee to Hear Millionaires Tax Extension
The Senate Budget and Taxation Committee will consider legislation this week to extend the temporary 6.25 percent individual income tax bracket through 2014
Maryland enacted a temporary income tax increase on high wage earners during the 2008 session. The bracket sunset after taxable year 2010. This legislation (SB 798) would extend the high earner bracket by four additional years, through taxable year 2014.
“Extending the individual income tax bracket would provide a disincentive for small business owners to reinvest in their companies at a time that we need to create more jobs,” Maryland Chamber Vice President of Government Affairs Ron Wineholt said.
The Maryland Chamber opposes this bill. The tax makes Maryland less completive, and it has a disproportionate impact on small businesses. Maryland had the eighth highest state and local income tax rate in the country last year, according to the Tax Foundation. The state’s top effective tax rate of 9.23 percent is far higher than neighboring states like Virginia, Delaware, Pennsylvania and West Virginia.
Many small businesses, who are organized as LLCs and S corporations, pay individual income tax, not corporate income tax. During tough economic times, we should be helping Maryland’s job creators, not increasing their tax liability. “Maryland businesses are struggling to create jobs as we slowly pull out of the recession,” Wineholt said. “Imposing another $70 million in taxes, predominantly on small business owners, is counterproductive. This tax should be allowed to lapse, as promised, so that Maryland can better compete for and retain jobs in the state.”
For more information, contact Wineholt at .(JavaScript must be enabled to view this email address).
