ANNAPOLIS, Md. — Gov. Larry Hogan said he will propose legislation next month to protect Maryland residents who stand to have their taxes go up because of the tax overhaul approved by Congress on Wednesday.
The governor, speaking in Annapolis hours before the bill received final passage about 30 miles (50 kilometers) away in the nation’s capital, said the full impact of the measure backed by President Donald Trump and Republicans in Congress isn’t fully known yet. But it is clear some people in Maryland will see their taxes go up, while others see theirs go down.
Hogan, a Republican, said he expects state revenues to increase by “hundreds of millions of dollars.” That’s because the loss of federal exemptions under the new legislation will increase the amount of income people have that can be taxed by the state. The legislation he will propose next month at the start of the 90-day session of the Democrat-led General Assembly will seek changes in state law to enable residents to keep that money.
“Our goal will be to leave all of that money in the pockets of hardworking Marylanders, and I’m confident that our partners in the General Assembly who have expressed concern over the impact of the federal bill, that they will support us unanimously in this legislation,” Hogan said. “Protecting taxpayers should be a bipartisan issue, so that’s my holiday gift to the people of Maryland.”
The Maryland comptroller’s office has been studying the federal tax overhaul and is conducting a detailed analysis on how it will affect the state. Comptroller Peter Franchot said his office expects to have a full report within a month.
Republicans in Congress contend the bill will benefit the economy because it will spur corporations to increase wages and hire more workers.
Democrats in Maryland and in the nation’s capital have strongly rejected that argument, saying the bill is a giveaway to corporations and the wealthy. Republicans in high-tax states such as New York, New Jersey and California also have expressed opposition.
House Speaker Michael Busch, a Democrat, said it is too soon to say how the bill will affect Maryland, but he said he wished Hogan had spoken out against it, as did Republicans in other states where leaders say residents could be harmed.
“Until we can put all of it together, I’m not going to make any speculation, but I wish the governor would have stepped up and spoke out against the tax bill early on,” Busch said. “It’s going to affect Maryland negatively, probably most negatively than any other state. I don’t think that’s a secret to anybody, because of the local taxes, so it’s going to have a negative effect on the citizens of the state of Maryland for sure.”
The tax overhaul would impose a $10,000 limit on the combined sum of property and state and local income taxes that a household could deduct. The $10,000 cap would help pay for corporate and personal tax cuts totaling $1.5 million over the next decade. Conservatives say unlimited state and local deductions amount to a subsidy for the wealthy in high-tax states. But many middle-class families in those states face disproportionately high housing costs and depend on deducting state and local taxes.
The Republican-controlled U.S. Senate narrowly passed the bill on a party line vote of 51-48 after midnight. The House gave the bill final passage Wednesday afternoon.