Study: 31 percent of Marylanders would pay more under Trump tax plan

from the Baltimore Sun

About 31 percent of Maryland households would pay a higher tax bill and roughly two-thirds would receive a tax cut under a proposal announced by President Donald Trump and Republican leaders in Congress, according to an analysis released Wednesday.

The study, by the left-leaning Institute on Taxation and Economic Policy, found 30.5 percent of Marylanders would face an immediate increase — the largest share in the nation — due mostly to the proposal to eliminate the frequently claimed state and local tax deduction.

Nearly 60 percent of Marylanders earning between $73,700 and $126,500 would receive an average tax cut of $1,280, according to the report. Another 41 percent in that income range would receive an average tax increase of $2,200.

Virtually all state residents earning above $657,800 would receive a large cut in taxes.

“What I see here is that this tax plan is incredibly skewed toward the ultrarich,” said Benjamin Orr, executive director of the Maryland Center on Economic Policy. “Most middle class and upper middle class Marylanders would see their taxes go up.”

It’s still a bit early to take any such analysis to the bank, however, because key details are missing from the GOP proposal. It’s not clear what income ranges will be used to define the plan’s proposed three tax brackets. It is also not clear which exemptions will be jettisoned.

Republicans have released only a nine-page memo, not bill text.

While many of the provisions most likely to affect middle class families remain murky, policies affecting the wealthy have been clearer — giving opponents an easy target. The proposal would eliminate the alternative minimum tax, a mechanism created to ensure rich families don’t skirt liability. It would also lower the top-rate for “pass-through” income earned by businesses and claimed on individual returns.

For Maryland, a state with one of the nation’s highest median incomes, the proposed elimination of the state and local tax deduction is among the most discernible impacts now. Forty-five percent of Maryland filers took that deduction in 2014, the highest percentage of filers in the country.

Most of the states that would be most affected by ending the deduction — New York, California, Maryland — tend to vote for Democratic candidates in national elections.