In a move signaling wide bipartisan support, Maryland Governor Martin O’Malley, a Democrat, has spoken out in favor of a Republican bill to lower agricultural taxes. In part due to the tough national and state economy as well as increasing farm production costs, many family farms in Maryland face growing economic burdens. In particular, the trend in the state has been towards increasing decline of agricultural land and the gradual decline of family owned farms.
The measure in question seeks to preserve and protect Maryland farms by lowering their estate taxes. Currently, Maryland farmers with agricultural properties worth more than $1 million face 16% estate taxes. The bill seeks to exempt the first $5 million of agricultural property from estate taxes entirely, and lowering the tax to 5% of property over $5 million.
This measure, supporters argue, would keep family farms solvent and would help guarantee that family farms stay in business. The Maryland Department of Agriculture reaffirmed the importance of agriculture in the Maryland economy. Governor O’Malley also threw his support behind Maryland farmers and their significance in the state economy.
The fiscal impact to Maryland, however, could be significant. Some estimate that reducing estate taxes could cost the state between $2 and $3 million each year, with losses to increase 5% each fiscal year. These costs, however, seem relatively insignificant when stacked against the larger goal of preserving Maryland agriculture from urban encroachment.
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Written by: Justin Ellison / Farm Plus Staff Writer