Cleaning Up Maryland’s Tax Code Would Support World-Class Schools
Maryland’s Commission on Innovation and Excellence in Education has outlined a path to create a world-class school system in Maryland. After a decade of eroding public school funding since the Great Recession, the path to achieving that vision will require Marylanders to strengthen our commitment to our education system. As outlined in the report “Building Our Future” by the Maryland Center on Economic Policy (MDCEP), cleaning up the state’s tax code would provide the resources we need to invest in good schools across the state while also creating a more equitable revenue system.
“Marylanders are facing an important choice. We can continue to spend our resources on ineffective tax breaks that benefit limited special interests and don’t help our economy, or we can fix our schools and support thriving communities across the state,” MDCEP Executive Director Benjamin Orr said.
The report recommends three steps to build a stronger, more equitable revenue system:
- Clean up our tax code. We should clean up Maryland’s revenue system by closing corporate tax loopholes, eliminating ineffective economic development subsidies, and reversing a recent cut to our millionaire estate tax. These special tax breaks benefit the powerful few but do nothing to help our economy.
- Modernize our sales tax. Maryland’s economy has changed a lot over the past several decades, but our tax code hasn’t kept up. We should modernize Maryland’s sales tax to reflect the increasing importance of services and online commerce to our economy. We can offset the impact on struggling Marylanders by expanding working family tax credits.
- Strengthen our income tax. Restructuring Maryland’s income tax will enable us to raise significant revenue, lower income taxes on most low- and middle-income Marylanders, and improve our upside-down tax code.
Together, these reforms will increase state revenues by $1.9 billion in fiscal year 2030 (adjusted for inflation)—enough to fully fund the state share of a robust public education reform package. The full report, including a technical appendix covering methodology, is available at mdeconomy.org/building-our-future.
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About Maryland Center on Economic Policy
The Maryland Center on Economic Policy advances innovative policy ideas to foster broad prosperity and help our state be the standard-bearer for responsible public policy. We engage in research, analysis, strategic communications, public education, and grassroots alliances promoting robust debate and greater public awareness of the policy choices Maryland residents face together. mdeconomy.org
