Death taxes are a common concern for families dealing with estate administration and wealth management. Some Maryland lawmakers are concerned that the state's 16 percent tax on estates with more than $1 million in assets may be driving wealthy citizens to greener pastures.
According to reports, both parties in the state General Assembly support a reform on estate taxes. Specifically, legislation that would raise the state's death tax exemption to match the federal level over the course of five years is on the table. Lawmakers have even tied the estate tax change to legislation that would raise the minimum wage, possibly to drive extra support.
Defenders of the state death tax argue that Maryland is not seeing a reduction in population due to individuals seeking tax shelters in other states. The state saw a 9-percent increase in the first decade of the century, according to the 2010 Census. Supporters of the tax exemption point to further analysis of the statistics.
Analysis shows the state's population increase comes from more births than deaths in the same time period, as well as from an influx of 321,000 immigrants. According to statistics, during the first decade of the century, 1,401,000 U.S. citizens moved away from the state. With only 1,335,000 citizens moving into the state, Maryland saw a net decrease, which experts say cost the state $5.5 billion in taxable income. It is this cost that lawmakers are hoping to avoid in the future, they say.
State tax and estate laws change on a regular basis. Not only is it important to plan early for retirement and estate administration, but it's also important to keep up with changing laws and reevaluate plans from time to time.