Skip to comments.Marylanders making $500K may pay a whole lot more tax
Posted on 03/16/2012 8:17:28 PM PDT by Tolerance Sucks Rocks
ANNAPOLIS The Maryland Senate passed a $35.9 billion budget package Thursday that would increase income-tax rates on nearly all earners and impose a flat income tax on residents making more than $500,000 a year.
The spending plan would boost the states income-tax brackets by as much as 0.25 percentage point a move expected to generate more than $500 million next fiscal year.
The budget bill passed after senators narrowly approved an amendment Wednesday night that would allow the state to tax half-millionaires, who make more than $500,000 annually, at the maximum 5.75 percent rate for every dollar they earn.
The half-millionaires tax which would generate about $30 million on its own was a major point of contention during Senate debate Thursday, with Republicans and some Democrats describing it as class warfare against the states wealthiest residents.
Under the proposal, a household that makes $501,000 a year the minimum to quality for the flat tax would pay over $2,500 more in taxes than a household that makes exactly $500,000.
Residents making less than $500,000 still would be taxed the traditional way, with gradually increasing rates applied to each chunk of income within a corresponding bracket.
Senate leaders said the change was needed to secure crucial votes from members of the Budget and Taxation Committee who had unsuccessfully pushed for a higher tax bracket on millionaires.
The last-minute amendment added to the across-the-board tax increase that the Senate approved in favor of a proposal by Gov. Martin O'Malley, a Democrat, to limit personal exemptions and itemized deductions on the top 20 percent of earners.
Mr. O'Malleys plan would have garnered $182 million in income-tax increases, although it included other revenue-generating proposals that the Senate rejected.
(Excerpt) Read more at washingtontimes.com ...
Maryland “Freak State” PING!
These guys never learn. This won’t generate more revenue. It will generate less. The people who are targeted will simply leave or find some other way around it.
I think Va. should have a special tax on all people from Md. moving who move in.
The government (state and federal) is attempting to leach every cent out of the populace they can in order to cover the huge deficient compiling daily by the Obama regime.
They won’t have to move very far to be ex-Marylanders, it ain’t a big state
This will work of course because people who are smart enough to make 1/2 M are too stupid to figure out how to establish residency in nearby states while maintaining a weekend home in Md.
Punishing people for being productive has always been a great idea. That has worked so well for California, Michigan, Louisiana and so many other democratic paradises...
Sure. Ask the UK and Kalipornia how much they have reaped from tax increases.
Do you give them a shove back to where they came from?
Swimmers? Add a few snakeheads and it would be a classic movie.
They will never get the revenue. The rich can afford to move and/or hire tax attorney to funnel money.
People are willing to pay more to stay in Maryland? Don’t believe it. If beautiful, sunny California couldn’t pull it off I don’t think Maryland can.
“half Millionaires tax” What is next the “You got a dollar in your pocket tax” Knock it off already with the taxing
“Marylanders making $500K may pay a whole lot more tax”
Let me help a bit with the headline:
“SOME Marylanders making $500K may pay a whole lot more tax”
Others will not, they will either:
1) Move to cheaper states
2) Earn less reportable income
3) Better hide their income
As Maryland will soon find out Tol, people with money have options, and that if you REALLY want to increase government revenues, then you must go after the Middle Class (who have far fewer ways to respond).
High earners in the private sector have talents that are in demand, which allow them to move to another state with more sane tax laws. This is something politicians and public sector unions demanding high taxes always overlook, since the only talent they have is finding ways to confiscate other peoples money.
or maybe they will do as liberals and hide their money in a “non-profit” organization that only has themselves as an officer/employee.
“The last-minute amendment added to the across-the-board tax increase that the Senate approved in favor of a proposal by Gov. Martin O’Malley, a Democrat, to limit personal exemptions and itemized deductions on the top 20 percent of earners.”
top 20%? I think it’s getting time for me to flee Maryland and go back to my native state of Pennsylvania. It wouldn’t be that much of a commute back to my job in the People’s Republic of Maryland and I understand that PA doesn’t apply their state/local tax to pension income.
Additional benefits would be the ability to vote in PA & have my vote actually mean something and the ability to gas up in PA to avoid the new 6% sales tax O’Malley is proposing to apply to gasoline sales.
you forgot (4) Invest in federally sponsored projects that give them a tax write-off.
Lots of people with Chicago-style connections in MD.
And, not only will the $500MM estimate be more like a $500MM loss, it will also be a job killer (aka job re-locater), as many of these "half-millionairs" have payrolls.
Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."
One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.
No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here).
The Maryland state revenue office says it's "way too early" to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It's easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: "Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it's easy for them to change their residency."
Saw this article and figured I’d *ping* you, this is going to mean an extra chunk out of you come tax time, isn’t it? ;)
I remember back in the 70’s when I returned from an overseas trip and the guy in customs asked me “have you traveled to any Communist countries” and then looked at my passport and said “oh wait, you’re from Maryland? you LIVE in one!”
I guess Maryland’s “millionaire” tax didn’t work out, so now they’re going after people who make $500K. Rats gotta tax!
Puck Maryland. Problem here is the liberal trash will move to VA.
You are correct, but Rats are a one trick pony; tax and spend other peoples money.
Don’t forget that Monty County will add to the burden of the increase since they take and additional 50% of what the MD takes.
Tax and spend its what Rats do.
Pretty soon the state will only have retired people, too old to move, and dumb young people living there. What a great foundation for a tax base.
The millionaires moved away and made things worse ,,, now the lost revenue must be made up in the middle class . Soon there will be no middle class in Md. . Maryland , the nanny state ,,, govt. control from cradle to grave . READ MY TAG LINE ,,, it says it all !!!
I am on the ping list.
This is just more sugar to coat the poison. He already passed the sales tax, cigarette tax, alcohol tax. Now he is pushing the gasoline and income tax. He coated all those middle class (and on poor) tax increases with two different taxes on the rich. Now some more sugar to coat the coming tax increases on us.
They tell voters:”Don't feel bad, we will make the rich pay much more than you so it's fair for all these critical investments for your future”
Why doesn't every Republican running for office challenge their opponent to take an oath to not raise taxes on the middle class? Call them on their bluff. It is because they are scared that they will someday.
READ MY LIPS. NO NEW TAXES. ;)
500,000 after taxes is not RICH anymore. It is upper middle class.....not rich. Now, those upper middle class, who don’t currently own a vacation home in Florida soon will.............only it won’t BE a vacation home : )
This tax will help Florida get out of its real estate slump : )
You rich guys need to start paying your fair share so we can have lots of high paying green jobs. I know you are part of that 1% that Obama says are keeping us down :)
The D. C. area economy appears to have prospered while the nation's economy, on average, has suffered under Obama. But if individuals can do well in Maryland, O'Malley and the MD legislature are there to confiscate their money. Maybe they think of themselves as agents of justice, but the result is to make sure that everybody is miserable.
That is a sub-story how Maryland got here. RINO Ehrlich governor promises not to raise taxes but then does when a budget crisis hits due to spending sent to him by Dem legislature but he calls them fees not taxes. Loses election in 2006 to O Malley.
In 2010 RINO Ehrlich challenges Dem O Malley over all the taxes he raised but O Malley’s ads call him a phony for raising taxes and lying about it after promising not to.
The Democrat made the Republican’s broken promise a campaign issue but the RINO was not able to make the Democrats much larger tax increases an issue. Now the Dems have a free license.
Mukulski Maryland.........: )
I should have said 500,000 BEFORE taxes, is merely upper middle class. That is a net of maybe 325-350,000.
And I have my own illegal immigrants to support....tank you vady much : )