For Release: March 11, 1999
Contact: David Almasi at (202) 507-6398 or [email protected]
Two taxes in the state of Maryland - inheritance taxes and a proposed increase in the cigarette tax - are criticized by members of the African-American leadership network Project 21 because they are unfair to all taxpayers and particularly hard on lower- and middle-class citizens, particularly upwardly-mobile blacks.
On March 11, 1999, the Maryland General Assembly will hold hearings on a bill introduced by Delegate Obie Patterson to repeal the state's inheritance tax, which heirs must pay in addition to the federal inheritance tax. Patterson says, "To tax people to the point that they don't have enough money left from their inheritance to make a down-payment on a home, send kids to college or keep the family business is not any way to support low- and middle-class families working their way up the economic ladder."
Federal inheritance taxes take between 37% and 55% of all assets - including from businesses, stocks and retirement plan savings - owned by the deceased. Maryland's inheritance tax is regressive, meaning it has a greater impact on estates of lesser value than larger ones. Nationally, inheritance taxes are a significant factor in the fact that only 30% of family businesses and farms make the transition to second generation ownership and only 13% survive to a third generation.
"Inheritance taxes are not an insignificant factor when one considers the endangered black farmer," said Project 21 member Michael Davis of Fort Washington, Maryland. "Restrictive inheritance taxes could also hinder the ability of black entrepreneurs to prosper and pass successful businesses on to the next generation."
Maryland's other tax, a proposed dollar-per-pack hike in the price of cigarettes, would also unfairly impact poor and minority communities. Governor Parris Glendening proposed the additional tax without offering tax relief in other areas to offset the burden the new tax would impose. State Senate President Mike Miller, Jr. criticized Governor Glendening's tax increase as "dangerously reckless" because the proposed 1999 state budget will not balance without imposing the tobacco tax.
Already, the 49% of Americans who earn $30,000 or less annually (only 15.9% of the nation's total annual income) pay 47.2% of tobacco taxes.
Project 21 has been a leading voice of the African-American community
since 1992. For more information, contact David Almasi at (202) 507-6398
or [email protected],
or visit Project 21's website at http://www.project21.org.