On May 22 Maryland Gov. Martin O’Malley signed into law a bill raising income 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. es and tobacco taxes and ending certain business tax breaks. The bill increases tax rates for single filers making over $100,000 ($150,000 for a couple) with a new top rate of 5.75% on income over $250,000 ($300,000 for a couple). It also cuts the personal exemption for each member of families with income over these thresholds. We’ve been covering the Maryland budget story here and here.
The bill also raises taxes on snuff and smokeless tobacco from 15% to 30% and the rate on ‘little’ cigars to 70%. Finally, the bill repeals telecommunication utilities’ corporate tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. s for property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es and includes in taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. some of the income from small business trusts.
Maryland’s legislature went into a special session beginning May 14 when the regular session ended without passing a budget. Lawmakers were motivated by the prospect that the state would turn to a so-called doomsday budget, where the projected increase of the budget would be cut by $500 million. Nonetheless, under the doomsday scenario, Maryland’s budget would have increased by $700 million, or 2%, over last year.
More on Maryland here.
|
Single Filers |
||
|
Bracket |
Old Rate |
New Rate |
|
>$0 |
2% |
2% |
|
>$1,000 |
3% |
3% |
|
>$2,000 |
4% |
4% |
|
>$3,000 |
4.75% |
4.75% |
|
>$100,000 |
4.75% |
5% |
|
>$125,000 |
4.75% |
5.25% |
|
>$150,000 |
5% |
5.5% |
|
>$250,000 |
5% |
5.75% |
|
>$300,000 |
5.25% |
5.75% |
|
>$500,000 |
5.5% |
5.75% |
|
Married Filers & Head of Household Filers |
||
|
Bracket |
Old Rate |
New Rate |
|
>$0 |
2% |
2% |
|
>$1,000 |
3% |
3% |
|
>$2,000 |
4% |
4% |
|
>$3,000 |
4.75% |
4.75% |
|
>$150,000 |
4.75% |
5% |
|
>$175,000 |
4.75% |
5.25% |
|
>$200,000 |
5% |
5.25% |
|
>$225,000 |
5% |
5.5% |
|
>$300,000 |
5% |
5.75% |
|
>$350,000 |
5.25% |
5.75% |
|
>$500,000 |
5.5% |
5.75% |