ANNAPOLIS, Md. (AP) — Harford County Executive David Craig announced plans Tuesday for phasing in tax cuts with the goal of eventually eliminating income taxes in Maryland, as part of his campaign in the Republican primary for governor.
Craig said he would aim for making the first phase of the tax cuts take effect in 2016, when he would seek to lower state income taxes to 4.25 percent for all earners. Current tax brackets go as high as 5.75 percent for state's wealthiest residents. Craig said his plan also calls for increasing the personal tax exemption from the current $3,200 to $5,000.
Craig said the state should be able to afford the tax cuts through a variety of budget reforms and a review of department and state agency operations. He said savings would be found across all state government departments and agencies.
"I have three children. I never told one they had to clean their room and the other two they didn't," Craig told reporters after a news conference outlining the plan. "Everybody's got to do it, because there's duplication everywhere."
He said it's time for the government to operate on less taxpayer money.
"Now, you tell me which of you can't live on 3 percent less a year than you did last year if you have to," Craig said. "Why can't the state do that?"
After monitoring the effects on revenues and working to save money in the budget, Craig said he would push to reduce income taxes to a flat 3 percent. Then, he would push to eliminate it the income tax altogether.
Craig said during his tenure as county executive, every county department submitted cuts. He said departments found duplications that were easy to cut and make savings.
"It's not eliminating people in positions," Craig said. "You eliminate positions as people retire, resign, go somewhere else. You start to merge positions together."
Craig is running for the GOP nomination against Republicans Larry Hogan, Ron George, Charles Lollar and Brian Vaeth. The primary is June 24. Craig also said he plans to make more announcements relating to tax reforms in coming weeks.
"There's a lot of frustration with people out there," Craig said, referring to Maryland tax increases in recent years. "They're getting more and more frustrated."
Democratic Gov. Martin O'Malley, who is term limited, proposed restructuring the state's income tax in a 2007 special session, and the Maryland General Assembly passed legislation that put new tax brackets into effect in 2008 for people who make more than $100,000 a year. Before the restructuring, Maryland had a fairly flat tax rate of 4.75 percent. There are now four tax brackets above that, including brackets of 5 percent, 5.25 percent. 5.5 percent and 5.75 percent.