Maryland To Give Wealthy Residents a Tax Break

The Maryland General Assembly passed a bill last week and it is currently waiting for the Governor’s signature. The bill would increase Maryland’s estate tax exemption and would probably result in a substantial loss of tax revenue for the state.

The estate tax is a tax on the right of a person to transfer property at death.[1] The Maryland estate tax applies to the value of the estate that is in excess of $1 million. The Federal estate tax applies to the value of the estate that is in excess of $5.34 million (in 2014).[2]

The new bill, HB 739[3], would gradually raise the Maryland estate tax exemption from $1 million to the federal exemption rate over the next five years. The increase of the exemption to the federal rate would result in a loss of revenue because more of the estate will go untaxed. Members of the General Assembly justified the tax cut by arguing that Maryland is losing its wealthy residents to jurisdictions with lower estate taxes, and the bill’s effect on fleeing Marylanders would mitigate the loss.

The General Assembly came through for their wealthier constituents, and Governor O’Malley is expected to sign the bill. If Governor O’Malley signs the estate tax bill into law, he may use the resulting political capital to help Maryland’s less fortunate residents. On the same day that the General Assembly passed the tax cut for the wealthy, Governor O’Malley held a minimum wage rally in Catonsville, Maryland. A bill is currently in front of the General Assembly that would raise the minimum wage to $10.10 from $7.25. [4]

If you, your family, or your business may be affected by this new bill (if enacted), contact The Goldson Law Office. They’re good at that stuff.

-The Goldson Law Office