Statement of Reggie Oldak, Democrat for County Council District 1

FOR IMMEDIATE RELEASE: Dec. 26, 2017

Montgomery County Council Gives Residents Option to Prepay Property Taxes

In an unprecedented December 26th special legislative session, the Montgomery County Council has authorized prepayment of County property taxes.

I submitted testimony in support of the measure as an appropriate response to the Tax Cuts and Jobs Act (TCJA) signed into law by the President on December 22, 2017.

If you are considering prepaying property taxes, please note the following:

  • Before you make a payment, check the County website for instructions, including information about how to determine the amount due. A Notice of Intent must accompany payments. 
  • You are responsible for making sure that your payment is postmarked by December 31, 2017. This year, that means Friday, December 29, because New Year’s Day falls on Monday.
  • The Internal Revenue Service has not yet ruled on whether this prepayment is deductible on tax returns for 2017. Consult your personal tax advisor before making the decision. It’s complicated, and I am not offering tax advice here.

With the TCJA, Republicans have put the interests of major corporations and the wealthiest households above everyone else. The TCJA caps the SALT deduction simply to pay for new tax breaks for millionaires and profitable corporations – not to reduce taxes for working families or make new public investments that benefit everyone. In addition, the new law creates huge deficits that some lawmakers will use later to justify damaging cuts to Medicare, Medicaid, Social Security, and other safety net programs that protect the elderly and other vulnerable populations. 

For those who itemize, the TCJA is plain bad tax policy. Capping the itemized deduction for state and local taxes (SALT) at $10,000 is especially bad for Maryland and Montgomery County residents. About 46 percent of Maryland tax returns included this deduction in 2015, compared to the national average of 30 percent, according to the Department of Legislative Services (DLS). Marylanders would have paid about $3 billion more in federal income taxes in 2015, had this deduction not been in place – an average of $2,328 per taxpayer, according to DLS estimates.

Not only will our residents face double taxation on some of their income and potentially see higher federal tax bills as a result of the TCJA. Capping the deduction will make it even harder for state and local governments to raise money to support the services we all rely on, at the same time that Congress shifts costs to state and local governments by sharply cutting funding for federal programs.

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