Gansler proposes a gradual reduction of Maryland’s corporate income tax rate


Maryland Attorney General Douglas F. Gansler. (Photo by Bill O'Leary/The Washington Post)

For months now, Attorney General Douglas F. Gansler (D) has been touting a plan to cut Maryland’s corporate income tax rate from 8.25 percent to 6 percent — a level that would match Virginia and, he says, make his state far more competitive in recruiting businesses.

On Wednesday, Gansler, who is running for governor, made clear for the first time that it would take awhile to get to his goal. Gansler said he would like to see Maryland’s corporate income tax rate drop by 0.25 percent a year. At that pace, it would take nine years to get down to Virginia’s level.

Gansler called it a responsible approach that would ultimately create many more jobs in Maryland and benefit the state’s economy.

“I think we’ll make an enormous amount of money over time,” he told an audience Wednesday night at a “newsmaker forum” in Baltimore hosted by the Baltimore Sun.

Gansler estimated the first year of the phased-in rate reduction would cost the state $35.6 million in lost revenue, which he said could be offset by closing a loophole that allows corporations to avoid paying taxes by transferring their profits to subsidiaries in other states.

In recent days, the rival gubernatorial campaign of Lt. Gov. Anthony G. Brown (D) has been attacking Gansler — including in a new Web ad — for his embrace of a tax cut that Brown said could drain about $300 million from Maryland’s budget each year.

Under the go-slow approach outlined by Gansler on Wednesday, the impact in the next few years would be a fraction of that. But Brown aides said that doesn’t change their argument that Gansler’s priorities are misplaced and jeopardize programs such as the expansion of pre-kindergarten education.

Justin Schall, Brown’s campaign manager, said Gansler has proven he’s “out of touch with the values of the people of Maryland.”

The June Democratic primary for governor also includes Del. Heather R. Mizeur (D-Montgomery).

John Wagner has covered Maryland government and politics for The Post since 2004.
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