Maryland’s 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. special session began today; expect more analysis on it from us tomorrow. However, we just received detail on S.B. 1302, the “State and Local Revenue and Financing Act of 2012.” The bill would raise income tax rates for high-income earners, defined as those making at least $100,000. The proposal also more aggressively phases out exemptions for those filers.
The rate changes:
| Singles | ||
| Bracket | Current Rate | Proposed 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 Filing Jointly, Head of Household | ||
| Bracket | Current Rate | Proposed 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% | 5.5% |
| >$225,000 | 5% | 5.75% |
| >$350,000 | 5.25% | 5.75% |
| >$500,000 | 5.5% | 5.75% |
Our back-of-the-envelope state income tax calculation for a dual-earner, two child family with $250,000 in federal adjusted gross incomeFor individuals, gross income is the total pre-tax earnings from wages, tips, investments, interest, and other forms of income and is also referred to as “gross pay.” For businesses, gross income is total revenue minus cost of goods sold and is also known as “gross profit” or “gross margin.” :
|
State |
Currently |
Under Maryland Proposal |
|
Maryland |
$16,786 |
$17,775 |
|
District of Columbia |
$16,612 |
$16,612 |
|
Virginia |
$11,651 |
$11,651 |
More on Maryland here.
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