It says 71% of Marylanders will see their federal taxes go down.
Annapolis, Md (KM). It’s a mixed bag is how Comptroller Peter Franchot describes the impact of the federal tax law will have on Maryland. He says his staff did an “exhaustive” analysis of how the legislation passed by Congress last year will affect Maryland. “Bottom line: 71% of all Marylanders are going to benefit from the federal tax cut..
His office also says 13% will pay more federal taxes, and 16% will see no change in their tax bills.
The report estimates the federal tax law means about $2.8-billion will be cut from federal taxes paid by state residents, with roughly two-million Marylanders seeing an average gain of about $1,741 per taxpayer.
But Franchot says he has some doubts about how this infusion of cash will affect the economy in the long run. . “Does that lead to anything other than a short term gift to taxpayers from the federal government.. That’s the open question. I’m skeptical about long term economic growth coming from this kind of trickle down economics,” he says.
And there is there is a down side, he says. “Some of the deductions that we’re accustomed to in Maryland, such as property taxes and local taxes of above $10,000, are not going to be deductible,”says Franchot. And that could mean fewer contributions to charities.
However,Franchot says he hopes for the best. “I am the chief fiscal officer of the state. I’m a huge booster of the nation’s economy and also of the state’s economy. I want the economy to succeed,” he says.
The report says state is expected to collect $28.7-million in additional revenue in fiscal year 2018, and $392.5-million the next fiscal year. “It’s a significant amount. About $500-million in state and local tax revenues will flow because of the loss of deductions. And that’s what the Governor and the Legislative Leaders are going to look at,” he says.
Marylanders won’t see the benefits on their tax returns until next year, says Franchot.
The analysis was conducted by the Comptroller’s Office using three-and-a-half million tax returns from 2014.
By Kevin McManus