Another Republican business plan
Former Gov. Robert L. Ehrlich Jr. wasn't the only Republican gubernatorial candidate to announce business proposals yesterday. Lesser-known contender Brian Murphy also released a policy idea -- albeit one that would take a lot of heavy-lifting to accomplish.
Like Ehrlich, Murphy, a Smith Island businessman, thinks Maryland's 8.25 percent corporate income tax -- money the state skims from company profits -- is too high. Ehrlich hasn't said what his ideal rate is, though he frequently points out that nearby states have much lower corporate tax. Ehrlich said he'd form a bipartisan task force to work on lowering the tax -- not specific, but practical, since any decrease would need the approval of the Democratic-controlled legislature.
Murphy said his aim is to erase corporate tax altogether -- an idea that has also been floated in neighboring Virginia, where the rate is already more than 2 percentage points lower than in Maryland.
"My goal is the phased elimination of our corporate income tax in three years. In the first year, we will balance and streamline our budget without raising taxes," Murphy said in a statement. "This will put our economy in a position to recover and grow. In the second year, we will reduce the corporate income tax rate by 50 percent, funded by organic growth to preserve revenue neutrality. This will give new and existing businesses an incentive to grow their Maryland operations. In the third year, we will eliminate the corporate income tax all together.
“Finally, after we make Maryland competitive for small businesses and families, we will revisit our personal income tax rates. Personal income taxes make up a greater portion of our state’s tax receipts, so eliminating them completely is not immediately possible."
Here's a link to the corporate income tax rates of all 50 states.