Top income-tax rate for Marylanders hits 57% if health tax goes thru
The House plan to finance national health care would tax income of more than $1 million annually at an additional 5.4 percent. The Tax Foundation calculates that would bring the top income-tax rate -- combined local, state and federal levies -- to more than 50 percent in 39 states. In Maryland the top rate would be 55.61 percent, the 7th highest in the nation, according to the foundation. Oregon would be No. 1, at 57.54 percent.
Actually, in some places Marylanders would pay more. The Tax Foundation used the average local tax rate for Maryland, which is 2.98 percent. But taxpayers in many counties pay more than 3 percent. In Howard and Montgomery counties it's 3.2 percent. That gets you to 57.35 percent, just ahead of Hawaii for spot No. 2.
(Math for Maryland: Local tax: 3.2%; top state rate: 6.25%; health care surtax: 5.4%; top federal rate: 39.6%; Medicare tax: 2.9%)
Comments
Top marginal rate, that is.
Posted by: Anonymous | July 16, 2009 8:59 AM
Considering that the richest people in the country pay an average federal income tax rate of 17%, quibbling over top marginal rates that are never realized seems pointless.
Posted by: dave | July 16, 2009 10:13 AM
57% sounds frightening. But broken down like this NYT article, the tax added by the health care proposal sounds reasonable:
“Starting in 2011, a family making $500,000 would have to pay $1,500 in additional income tax to help subsidize coverage for the uninsured. A family making $1 million would have to pay $9,000.” The surcharge rises with income, and over time, to hit 5.4% (by 2013) for households earning over $1 million annually. Households making between $280,000 and $500,000 per year would only face a 2% surcharge by 2013."
Posted by: Brian | July 16, 2009 10:22 AM
Maryland looks like "tax hell" when personal income tax is singled out, but in overall tax bite, we're middle of the road.
Maryland: High income tax, moderate sales tax (narrowly applied), low property tax, and few if any special service district taxes. Not bad for a great place to live.
- Steve Lebowitz, Annapolis
Posted by: justdafacts | July 16, 2009 10:51 AM
If one believes the NYT then the number of millionaires in NYC is going to vanish faster then the number in Maryland has.
Posted by: Dan | July 16, 2009 1:58 PM
Marginal tax rates matter a lot as they provide a real disincentive for individuals to pursue extra income or make an additional investment. Why put additional money or time at risk if any additional income will be taxed at such a higher rate? The end result being economic productivity declines, few jobs are created and the talking heads can't figure out why the economy is not getting better.
Posted by: Dan | July 17, 2009 1:23 AM
Dan, but then how will the tax attorneys and CPA's be able to support themselves?
If the tax structure were simple and straightforward and (dare I of all people say it) rational... then what? ;)
Q: What year was it when the "tax reform" package that Congress passed was known as ""the tax attorneys and accountants support act of _____ "?
Posted by: MrRational | July 17, 2009 10:47 AM
Hey Steve do tell me what did OMalley have for breakfast this morning!
Great place to live.
Obviously you don't live in Charm City one of the most dangerous cities in America.
Drug dealers in the alley, helicopters overheard, shooting in front of my home, car broken into, the list goes on
a great place to live.
Our Democratic leaders are doing a great job right Steve.
After all it is their policies in this city.
Liberal justice!
Maryland taxes retirement income.
Explain that one oh wayward one!
Get your head out of OMalley's arse and try seeing reality!
Posted by: jay | July 17, 2009 2:53 PM