Maryland Income Tax Proposal Raises Rates Above $100,000

May 14, 2012

Maryland’s tax 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 income:

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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