Issue Position: Maryland's Death Tax

Issue Position

Everyone knows people who have moved to Florida to escape Maryland taxes. Florida has no personal income tax and also has no estate tax. As noted elsewhere, Maryland's personal income tax has been increased twice during the O'Malley years. Even worse, our estate tax of 16% is a huge disincentive for our elderly people to remain Maryland residents. We should be valuing our elderly people and cherishing the remaining time that we have to spend with them, not driving them out of state through confiscatory taxation.

Recently, federal estate tax laws were changed and now provide a $5,250,000 estate tax exemption. Most taxpayers will not leave an estate over $5,250,000 when they die and therefore will not need to worry about federal estate taxes depriving their children of their rightful inheritances. By contrast, Maryland's estate tax exemption is only $1,000,000. Because of life insurance, pension funds, appreciated home values and the like, many Maryland residents will leave estates over $1 million, sometimes considerably over $1 mllion.

Let's take a hypothetical widow who expects her estate to be approximately $5,250,000. If she continues to live in Maryland and dies in this State, her estate will pay $680,000 in estate taxes to the State of Maryland. If she moves to Florida, on the other hand, her estate won't owe the State of Florida a single cent in estate taxes. Faced with that choice, is it any wonder that droves of Maryland citizens are choosing to move to Florida when they retire? Isn't this a shame?

Maryland should increase its estate tax exemption to match the federal exemption. This modest change will remove a principal reason why our elderly citizens leave Maryland.

The bottom line: If elected, I will introduce legislation to increase Maryland's estate tax exemption so that it is identical to the federal exemption.

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