If the main question was which the Augustine Commission would choose between Corporate Income Taxes and Pass-Through Income Taxes as their preferred business-friendly tax cut… the answer appears to be “both.”
The Maryland Economic Development and Business Climate Commission – chaired by former Lockheed Martin CEO Norman Augustine – has issues its much-awaited report on tax incentives to promote Maryland competitiveness. Rather than selecting one item and rejecting others, the Commission has made some specific and some general endorsements, but appears to leave a range of options (and the task of deciding how to balance them against competing service pressures) to the General Assembly. (These items are according to advance copies of the Commission Report obtained by multiple media outlets)
A draft of the panel’s final report, obtained by The Baltimore Sun, shows that the group headed by former Lockheed Martin chief Norman R. Augustine will call for cutting the corporate income tax from 8.25 percent to 7 percent over three years.
Another panel recommendation that could affect more companies than the corporate tax is to lower the personal income tax on mostly small businesses that pass that liability to their owners. Without giving specific numbers, the report calls for income tax exemptions for some partners in such business. The recommendation is in line with the top priority of the Maryland Chamber of Commerce.
These two items, both with potentially substantial fiscal effects, were seen by many as competing priorities. The Commission also embraced an acceleration of the phase-in of estate tax cuts already in law, but rejected a proposal to impose “combined reporting” on multistate entities doing business in Maryland. The Commission’s full report will be formally revealed and discussed in the days ahead in the General Assembly.