Lawmakers plan to push a tax cut bill House leaders want debate on reducing personal income rate

'We can't sit back'

Governor proposes withholding decision until revenue forecast

February 07, 1996|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

An article in yesterday's editions incorrectly reported the size of a personal income tax cut sought in a bill sponsored by Republicans in the Maryland Senate. The legislation would cut the rate by 10 percent, phased in over four years.

The Sun regrets the error.

In an effort to keep up pressure for tax relief, several leaders of the House of Delegates plan to introduce legislation this week to cut Maryland's personal income tax rate by 10 percent over three years.

Although they agree with the governor that a tax-cut decision is weeks away, the House leaders say they want to begin discussing the issue while waiting for a state revenue forecast in March and a possible resolution to the federal budget impasse in Washington.

FOR THE RECORD - CORRECTION

The bill is to be sponsored by Del. Sheila E. Hixson, a Montgomery County Democrat who is chairwoman of the House Ways and Means Committee. Its co-sponsors will include several other chairmen of House committees.

House Speaker Casper R. Taylor Jr. is not an official sponsor, but has given his blessing to the measure.

"I expect to have a full-blown, in-depth analysis and debate on the issue," said Mr. Taylor, a tax-cut proponent.

"After we have determined, to the best extent we can, where our economy and the federal budget is taking us, we'll look at whatever we can do to improve our business climate," said Mr. Taylor, a Democrat from Cumberland.

Gov. Parris N. Glendening, who said last year he supported a tax cut, announced last month that he now wants to wait until March to see if the state can afford one.

The new House bill would cut the state's highest tax rate on personal income, over three years, from the current 5 percent to 4.5 percent. The measure eventually would cost the state roughly $400 million a year.

Del. Michael E. Busch, chairman of the House Economic Matters Committee and one of the bill's co-sponsors, said such a cut would help Maryland attract more private-sector jobs to counteract the loss of federal jobs.

"The idea is if we're going to be pro-business, we have to get in the water and start rowing," said Mr. Busch, an Anne Arundel County Democrat. "We can't sit back and wait."

The legislation being sponsored by the House leaders would join several other bills already submitted by other legislators.

Sen. John A. Cade and the other 14 Senate Republicans have introduced a bill to slice the personal income tax rate from 5 percent to 4.75 percent.

"I think it's important to put something on the books to reassure the taxpayers we're moving in the direction of personal income tax relief," Mr. Cade, an Anne Arundel Republican, said. "If we don't start on this effort, we are never going to finish."

Del. James W. Campbell, a North Baltimore Democrat, also is proposing a 5 percent income tax cut. However, his bill would offset the loss of about $200 million in state revenue by expanding the sales tax to cover many services that now are exempt from the tax, including car repairs, funerals and extermination services.

"If we really want to cut income taxes, this is a way to do it," he said. "I felt this was an option we haven't looked at enough."

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