Evening star., 1950-01-15
Lane 10 Ask Cut
In Income and
Property Taxes
&c Rote Suggested
And $500 Exemption
For Dependents
By the Associotad Press

ANNAPOLIS, Jan. 14.-Gov.
Lane will ask the General Assem-
bly, next month to enact legisla-
ton that would cut an estimated
$3,750,oOO from the tax bills Of
The Governor announced to-
night he will propose that the
tax rate be dropped to
six cents per $100 of assessed value
the lowest point in the States
history" Such a reduction would
amount to about $2,500,000.
The 1850 property tax rate is
12.39 cents per $100 and last years
was Ills cents.
Gov. Lane said he will ask the
to reduce income taxes
by increasing exemptions for de-
pendents from $400 to $500, dou-
bling the personal exemptions Of
those over IS, and extending the
use of the short form return to
those with less than $500 in in
vestment income.
The latter change would cut the
tax rate on investment income Of
less than $500 from per cent
to 2 per cent.
225,000 to Benefit.
The income tax reductions would
aggregate about $1,250.000 for at
least 225,000 taxpayers, the Gov
ernor estimated.
He said that his reduction pro-
gram is based on recommended
tions of the special State Tax
Survey Commission appointed last
June.
The commission suggested that
no changes be made at the pres
ent in the sales tax or other gen. \
eral treasury revenue sources"
The commission said the in
crease in income tax exemptions
for dependents would give direct
relief to at least 10000 taxpayers
with about 211,300 dependents.
1t would reduce the current
basis of taxable income by about
S42 ,268,0 and would mean a
total savings to taxpayers of about
1899 900.
Relief for Tax Group.
Approximately so per cent of
the Maryland income taxpayers
report from $4,000 to $4,000 of
taxable net income" the COM
mission said.
While this group pays 80 per
Icent of the tax bill. it is burdened
leconomicallyl with 81 per scent
Iof the claimed dependents.
"It seems only just, therefore.
that this group be given the major
fportfon of the tax relief currently
available"
. Personal exemptions Of about
$4,000 taxpayers would be doubled
by the "65 or over" clause. This
would mean a revenue loss to the
State of about $4,000.
About $1,000 taxable returns
would be affected by the change
in the investment income cate
CORY. This would reduce state
revenues by approximately $15S,
800.
The governor said he will ask
immediate action on the income
tax reductions so that they may
be made effective for the returns
due on April Is.
Effective Next Year.
The property tax reduction
would go into effect next year.
Maryland services most of its
bond issues with proceeds from
the property tax.
In explaining his proposal, Gov.
Lane said:
THE long standing policy of
levying for all authorized bonds,
whether issued or not, has in
creased the amount available for
debt service beyond requirements.
The analysis (by the tax sur
vey commission) of the debt SER
vice fund also disclosed that there
would be on hand at the end of
the year a sufficient balance to
reduce the State tax rate to 6
cents, and to continue this reduc-
tion in effect, or at near this level,
for the next several years.
OF course, the State tax rate
could not be held at this level If
the General Assembly authorized
the issuance of a substantial
amount of new bonds"
New Formula Planned.
Maryland's cities and counties
now get portion of the State in
come taxes collected within their
boundaries.
Gov, Lane said that when he
sends his tax reduction program
to the General Assembly, he will
propose new formula for dis
tribution of income tax revenues to
Baltimore City and the counties
IN order that the State will absorb
the total revenue loss, thereby pre-
venting any burden from falling"
on the subdivisions.
He gave no hint as to what the
formula would be.
Republicans to Sponsor
Tox Cuf IenisT1+;on