J.R. 7 JOINT RESOLUTIONS

FOR the purpose of requesting the Maryland Congressional Delegation to sponsor an
amendment to the Internal Revenue Code to eliminate a disparity in the income
taxation of State, local, and federal political campaign committees.

WHEREAS, Under § 527(b) of the Internal Revenue Code, a political
organization generally is not eligible for lower graduated marginal rates on the first
575,000 of its taxable income as are available to corporations generally; and

WHEREAS, As a result, the taxable income of a political organization generally is
taxed entirely at the highest marginal rate of 34%; and

WHEREAS, Corporations generally are subject to graduated marginal federal
income tax rates of 15% on the first $50,000 of taxable income, 25% on taxable income
between $50,000 and $75,000, and 34% on taxable income in excess of $75,000, with the
benefit of the lower marginal rates being reduced if taxable income exceeds $100,000
and with that benefit being phased out completely if taxable income exceeds $335,000;
and

WHEREAS, Under § 527(b) of the Internal Revenue Code, political
organizations generally are not eligible for the lower graduated marginal rates and the
taxable income of a political organization generally is taxed at the highest marginal rate
of 34%; and

WHEREAS, Under § 527(h) of the Internal Revenue Code, a candidate for
Congress may have one principal campaign committee that is eligible for the lower
graduated marginal rates on the first $75,000 of taxable income; and

WHEREAS, Only a candidate for Congress, and not a candidate for other federal
or state or local public office, may designate a principal campaign committee to be
eligible for the lower graduated marginal income tax rates; and

WHEREAS, As a result of the inability of a candidate for public office other than
Congress to designate a principal campaign committee, the entire taxable income of the
campaign committee of such a candidate is subject to the highest marginal rate of 34%;
and

WHEREAS, The General Assembly believes that this disparity in the federal
income tax treatment of candidates for state and local public office on the one hand and
candidates for Congress on the other should be eliminated, and that political campaign
committees with taxable income should be treated the same for federal income tax
purposes whether the candidate is running for federal, state, or local public office; now,
therefore, be it

RESOLVED BY THE GENERAL ASSEMBLY OF MARYLAND, That the
Maryland Congressional Delegation is requested to sponsor federal legislation
amending the Internal Revenue Code to allow candidates for state and local public
office to designate one principal campaign committee to be eligible for the lower
graduated marginal income tax rates; and be it further

RESOLVED, That a copy of this Resolution be forwarded by the Department of
Legislative Reference to the Maryland Congressional Delegation: Senators Paul S.

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