Maryland does not have a 21st-century tax system. And it’s time for our state to reduce working families’ income tax responsibilities and ensure the ultra-rich are paying their fair share. Here’s the problem:
- According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Maryland is rated as 42nd in fairness. Incomes are more unequal in Maryland after state and local taxes are collected than before.
- During the worst economic crisis since the Great Depression, the total wealth gain of America’s 650 billionaires has grown by a third. Put another way, these 650 billionaires now have twice as much wealth as the bottom 50% of all U.S. households.
- Maryland has the second highest concentration of millionaires in the U.S., but they pay the smallest share in state and local income taxes.
- Three of the seven largest public corporations headquartered in Maryland paid no state income taxes in at least one of the past three years despite hundreds of millions in profits. Large, multi-state corporations like these can take advantage of loopholes to avoid tax responsibilities while small businesses play by the rules and pay their fair share.
- This unfortunate reality reinforces both economic and racial inequalities.
- In recent years, legislators have rejected proposals to eliminate a special tax break for country clubs, while also raising the estate tax exemption from $1 million to $5 million.
- Capital gains income is taxed at a lower rate, allowing wealthy investors to avoid paying their fair share of taxes on income.
Policymakers must pass a fair tax plan that cleans up loopholes in our tax code and asks large corporations and wealthy individuals to pay their fair share while lowering the tax burden for middle-income and lower-income families. Only then can we invest in education, healthcare, and public infrastructure, and protect essential public services and jobs.