In an effort to keep wealthy Maryland residents in Maryland, the Maryland General Assembly voted to cut the state’s estate tax. Unless vetoed by Gov. O’Malley, the new law would raise the exemption to $1.5 million next year and $2 million in 2016. The exemption would rise to $3 million in 2017 and $4 million in 2018 before being coupled with the federal exemption in 2019. The federal exemption, which is indexed to inflation, is projected to be $5.9 million in 2019.
Below is the projected fiscal impact on the Maryland Budget:
|($ in millions)||FY 2015||FY 2016||FY 2017||FY 2018||FY 2019|
This table does not account for the savings in tax revenues from those persons who elect to stay in Maryland. Maryland residents will continue to pay income taxes, sales taxes, and the myriad of other taxes they pay every year.
It also doesn’t take into account the benefits associated with having Marylanders reach retirement age in the state. These people are generally net positive taxpayers and they use fewer services than they pay in taxes.