Federal Tax Reform: Likely Benefits and Costs for Maryland

Daniel J. Mitchell, Ph.D. Dec 20, 2017

For the first time in more than three decades, lawmakers in Washington have produced some semi-significant tax reform. Maryland will enjoy considerable direct tax relief from the plan, totaling more than $3 billion annually over the next decade based on the size of the tax cut and Maryland’s share of national economic output.[1] However, some Marylanders—especially those living in the wealthy suburbs of Washington, DC—may end up paying more in federal taxes.

The direct tax effects on individual taxpayers is just part of the story. The core features of the tax package are intended to boost the economy. This should yield an indirect positive effect on Maryland because of changes in the macroeconomic environment and because certain provisions would have a greater-than-average effect on the state.


[1] Bureau of Economic Analysis, “Gross Domestic Product by State, 2016.” https://www.bea.gov/iTable/index_regional.cfm