This is an update to my previous comments here.
Today, I filed written comments in opposition to Maryland H.B. 61 that would exempt large amounts of retirement income from Maryland state income tax. My initial comments, with all attachments, can be found here. Included as an attachment is an updated chart that was linked to in my previous posting. I went over my calculations and found several to be incorrect. The skew in favor of the wealthy was not as bad as I had previously calculated, but was still quite significant.
After I sent off my comments, the Tax and Policy Note on H.B. 61 was posted. The calculations in that note will undoubtedly kill the bill since, over five years, there will be billions of dollars of revenue loss. I then sent a second letter to the Committee.
In a sense, H.B. 61 is a prelude to the bill that the Governor has introduced, H.B. 342. That bill also exempts broad swaths of pension income, but tempers the cuts somewhat by capping the exempt income to $50,000 and limiting the full benefit to individuals making less than $100,000. In due course, I will be commenting on that bill as well.
The point is that the bulk of the incentives to save for retirement provide benefits that are weighted heavily toward the wealthy.