http://www.hometownannapolis.com/cgi-bin/read/2006/03_17-41/GOV
Annapolis attorney Colleen Sinclair Prosser handles scores of estates every
year, and more than half of them involve clients grumbling over Maryland's death
tax.
"What I say to people is: 'In order to avoid the tax, you have to be (worth)
under $1 million. Are you really comfortable giving away your assets until you're
under $1 million?'" she said. "Most people aren't."
But in this election year, state political leaders might be willing to make
dying cheaper.
Gov. Robert L. Ehrlich Jr. has set aside $14 million in his budget proposal
to eliminate the estate tax, following the federal government's lead, and the
House and Senate are considering several bills with different approaches to
the issue.
"I feel fairly certain something will pass," said Sen. Ulysses Currie,
D-Prince George's, chairman of the Senate's Budget and Taxation Committee.
Attorneys said you don't have to be rich to trigger the tax. A life insurance
policy could push someone over the $1 million exemption, and other big ticket
items like a house, car and pension fund all count.
The federal government's version of the tax is also being phased out, and will
expire in four years.
Savvy taxpayers figure out all kinds of ways around the taxes, or hire attorneys
to help them. They set up annuities, or slowly buy their parents' house over
a long period of time so there is less to pass on when they die. Others, like
farmers, don't think about it until it's too late, and risk losing their properties
and livelihoods.
"I think there needs to be a balance between the working Joe and rich
people with houses valued at over $1 million," said Senate President Thomas
V. Mike Miller Jr., D-Calvert.
Mr. Currie's bill raises the amount of an estate that would be exempt from
the tax to $2 million. It would cost an estimated $38 million in lost revenue
during the first year, ballooning to nearly $69 million in the fifth year.
Republicans smiled when told about Mr. Currie's bill, because they pushed similar
measures to no avail in the Democrat-led legislature last year.
Sen. Janet Greenip, R-
Crofton, wanted to raise the exemption and was punished when she tried to amend
the bill onto another measure.
The Budget and Taxation Committee slashed state aid for the Community Center
in Severna Park in retaliation, and local delegates had to scramble to get the
money back.
"So it must be good now?" Mrs. Greenip said. "That's great.
It's past due, actually."
Mrs. Greenip's bill would have been cheaper. It would have cost $14 million
in the first year, ramping up to $56 million in the fifth year. All of the bills
have slight variations in their requirements that alter the pricetag.
Del. Herb McMillan, R-Annapolis, poked fun at Mr. Currie for proposing a bill
even more expensive than Mrs. Greenip's.
"I hope he doesn't lose any projects in his district because he is doing
that," Mr. McMillan said. "He sure does have guts."
The most sweeping legislation on the death tax is sponsored by Del. Bob Costa,
R-Deale. It does away with the estate tax, and also a 10 percent inheritance
tax on items bequeathed to nieces, nephews and friends.
That bill has a whopping price tag of $116 million in the first year, and as
much as $210 million in the fifth.
"It doesn't cost the state anything," Mr. Costa said. "It lets
the people keep their money."
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