By Erich Wagner
Erich@MarylandReporter.com
The House Ways and Means Committee approved Gov. Martin O’Malley’s proposal to reward businesses for hiring unemployed workers, despite a Republican attempt to change the tax credit into a much bigger tax cut.
The committee amended their version of the governor’s bill to mirror the plan passed by the Senate, which increased the credit from $3,000 to $5,000 per worker. The committee also added language stating that the intent of the bill is for companies to hire people indefinitely, not just on a temporary basis for the purpose of getting the tax credit.
But Del. Christopher Shank, R-Washington, proposed an amendment that would strike the bill entirely and instead reduce the corporate income tax rate from 8.25 percent to 7.75 percent.
Shank said that the bill was a “good step” in the direction of helping businesses through the recession, but that they would be better off with “broad tax relief.” Shank acknowledged that his proposed tax cut would cost the state $50 million, $30 million more than the $20 million price tag of the governor’s proposed tax credit.
“This is easily attainable if used in conjunction with the $800 million in [House Republican] proposed budget cuts,” Shank said.
Del. Kumar Barve, chairman of the revenues subcommittee, which had already voted down the amendment, said the high cost of Shank’s plan would run counter to the bill’s purpose.
“This would really be more appropriate if introduced as a separate bill,” Barve said.
The committee voted along party lines to kill the amendment. And only one committee member voted against the legislation, Del. Bill Frick, D-Montgomery.
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