Even before its state budget tanked, Maryland in 2008 added four new income tax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. , including a top rate of 6.25% on income over $1 million. In doing so, Maryland joined New Jersey and California with such a “millionaires taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. ,” and now they also exist in Connecticut, Hawaii, Oregon, and Wisconsin.
Joining previous evidence suggesting the harm caused by millionaires taxes in New Jersey and Maryland, local officials in Montgomery County, Maryland add their experiences in a Washington Examiner article:
County data show that 216 millionaires who filed taxes for 2007 did not file with the state for 2008.
In the previous four years, the number of millionaires who didn’t file taxes the previous year averaged 119. Chief Administrative Officer Tim Firestine called last year’s increase “significant” and said there’s strong evidence to suggest that the millionaire tax is hurting the county.
County Executive Ike Leggett said some wealthy county residents who own houses in other states told him that they would establish residency in other states to avoid the millionaire tax.
“You don’t want to give them that temptation,” Leggett said, referencing whether the state should renew the tax. It is set to expire at the end of this year, but the General Assembly is considering an extension.
Although Maryland Gov. Martin O’Malley (D) was a big booster of the millionaires’ tax, the article quotes a spokesperson who says that “the governor does not support an extension.”
More on Maryland here.
More on income taxes here.
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