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House committee slashes tax increases

The House Ways and Means Committee on Monday approved its own tax package slashing many of the tax hikes approved by the Senate last week.

Voting along party lines, the committee approved 16-6 a tax proposal that would raise $190 million for state coffers — about half of the $415 million that would be raised by the Senate’s version.

The committee’s plan raises the income tax rate by .25% only for earned income over $100,000, rather than for anyone making $3,000 or more a year as the Senate had proposed. It also eliminates a controversial plan to tax all income for those making more than $500,000 a year at 5.75%.

In addition, the committee scrapped a Senate plan to apply the sales tax to online purchases and tweaked tax increases on premium cigars and smokeless tobacco.

Earlier in the day, sponsors of the Senate income tax bill defended their proposal before the committee.

Sen. Edward Kasemeyer, D-Baltimore County, fielded a variety of Republican criticisms, admitting that the income tax increase approved by the Senate had upset many of his own constituents.

“We realize what we’re doing makes a lot of people angry,” said Kasemeyer, adding that he had received multiple letters laced with profanity since the Senate passed the bill Thursday.

Republicans echoed many concerns that were made on the Senate floor last week, including the fear that raising the income tax rate for those making more than $500,000 a year to 5.75% would drive businesses from the state.

Opponents were excluded from testifying against the bill, drawing the ire of some Republicans. Chairwoman Sheila Hixson, D-Montgomery, said it was a longstanding policy to only hear sponsors’ testimony on bills from the other chamber.

However, that did not stop House Minority Leader Anthony O’Donnell, R-Calvert, from asking to testify against the bill at the end of the hearing, a request which was denied by Hixson.

Speaking to reporters after the hearing, O’Donnell said that the Senate passed the income tax bill last week without full knowledge of its impact, pointing to the release of a revised fiscal note from the Department of Legislative Services that had only come Monday morning.

Describing the Senate proposal as “outrageous,” O’Donnell said Hixson could have allowed testimony.

“Clearly, the majority did not want opposition to be heard on this bill,” said O’Donnell.

The committee’s tax proposal now makes its way to the House floor where it will likely come for a vote this week.

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