MTA Testimony: MTA Urges Complete Inheritance-Tax Repeal
February 6, 2001

MTA
Maryland Taxpayers Association, Inc.
 STATEMENT ON H.B. 90 & 477
by
Richard Falknor
Vice President, Maryland Taxpayers Association, Inc.
Before the House Ways & Means Committee
February 6, 2001
3:00 P.M.

Chairman Bozman, HB 90-sponsor Delegate Patterson, members of the subcommittee. I am Richard Falknor, vice president of the Maryland Taxpayers Association, whose members urge your strong support of HB 90 to complete the repeal of the inheritance tax, the first step of which you and other members of the General Assembly took last year.

To paraphrase HB 90's Fiscal Note, Maryland now imposes two death taxes, the "pick-up"estate tax if a Federal estate tax return is required for the death of a decedent, and the remaining inheritance tax of 10 per cent of property from a decedent's estate falling now on so-called collateral heirs.

Under current Maryland law, only those estates over $ 675,000 passing to collateral heirs
receive a credit against the "pick-up" estate tax for Maryland inheritance-tax payments.
The vast majority of estates in Maryland are less than $ 675,000 and thus most collateral heirs do not get this relief.

This is just one more reason why the Maryland inheritance tax on collateral heirs disproportionately hits hard-working middle-class families and their small businesses.

Tax experts underscore the perverse effects of inheritance and estate taxes.
The Heritage Foundation's William Beach finds that death taxes hurt small business:

Investing in a business is one of the many ways to save for the future. For most small firms, every available dollar goes into the business--the dry cleaning firm, the restaurant, the trucking company--to ensure that it sustains an income for the owner's family and is an asset to pass on to children. Women with children often find self-employment to be the only entry-level work available. Minorities, many of whom wish to raise their families in ethnic communities, understand well the virtues and promises of self-employment. Yet the financial security that family-owned and small businesses provide these Americans is put at risk if the owner dies with a taxable estate.

MTA's Vision and HB 477: While MTA is indeed a not-for-profit organization providing the Maryland Assembly and other official bodies with expert testimony on crucial fiscal matters, it has far more than a green-eyeshade perspective. As a grass-roots, statewide coalition of taxpayer and property-rights organizations, MTA is striving to help build an opportunity society in the Free State by diminishing state and local taxes, through regulatory reform, and by enabling all its willing citizens to become stakeholders in Maryland's prosperity.

Thus MTA also draw the subcommittee's attention to HB 477, our flagship proposal in this session, which would allow the voters of Maryland to decide whether to refund future tax surpluses, and would ask, Chairman Bozman, that you schedule a hearing on this important measure during this session of the General Assembly.

Citizens and legislators can get additional facts and analyses from our website www.mdtaxes.org. MTA president Kenneth R. Timmerman is available in person and through the website to discuss our priorities and HB 477 in particular.

Thank you.