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Thu May 17, 2012, 01:07 AM

Md. passes income tax hike on six-figure earners

Source: Washington Post

More than 300,000 Maryland residents will pay higher income taxes under a package given final approval by the legislature Wednesday.

The tax increase affects single-filers reporting income in excess of $100,000 and joint-filers reporting more than $150,000 in Maryland, the state with the nation’s highest per-capita income.

Democratic lawmakers closed ranks behind Gov. Martin O’Malley (D), who argued that his administration needed more money to continue record spending on education.

O’Malley’s tax increases — combined with a move the legislature supported to shift teacher pension costs to counties — will close half of a $1 billion gap that had been forecast for the rest of the decade.

Read more: http://www.washingtonpost.com/local/md-politics/md-passes-income-tax-hike-on-six-figure-earners/2012/05/16/gIQAfPutUU_singlePage.html

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Reply Md. passes income tax hike on six-figure earners (Original post)
alp227 May 2012 OP
bluestateguy May 2012 #1
Tushon May 2012 #2
PSPS May 2012 #3
yellowcanine May 2012 #5
Mojorabbit May 2012 #7
Nancy Waterman May 2012 #15
ProgressiveProfessor May 2012 #4
yellowcanine May 2012 #6
ProgressiveProfessor May 2012 #8
CreekDog May 2012 #10
yellowcanine May 2012 #12
ProgressiveProfessor May 2012 #13
yellowcanine May 2012 #16
CreekDog May 2012 #9
ProgressiveProfessor May 2012 #11
CreekDog May 2012 #14
Posteritatis Jun 2012 #18
suziequeue Jun 2012 #17

Response to alp227 (Original post)

Thu May 17, 2012, 01:21 AM

1. I wouldn't have gone down as low as $100-$125 grand

In the DC suburbs that is not rich at all.

I would have started the tax increase at the $200 grand level for individuals and $250 for joint filers.

And then I would have saved taxpayer money by emptying the jails of all non-violent drug offenders.

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Response to bluestateguy (Reply #1)

Thu May 17, 2012, 01:35 AM

2. I have the feeling

that drug law reform is less palatable than tax reform to most people. REEFER MADNESS!

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Response to bluestateguy (Reply #1)

Thu May 17, 2012, 02:30 AM

3. Look at the proposed changes. The increase is miniscule.

Maryland tax increases

Marginal tax rate increases

For single filers, on income of:

●$100,001 to $125,000: to 5 percent from 4.75 percent.
●$125,001 to $150,000: to 5.25 percent from 4.75 percent.
●$150,001 to $250,000: to 5.5 percent from 5 percent.
●$250,001 to $500,000: to 5.75 percent from 5 percent or 5.25 percent.
●$500,001 and above: to 5.75 percent from 5.5 percent.

For joint filers, on income of:

●$150,001 to $175,000: to 5 percent from 4.75 percent.
●$175,001 to $225,000: to 5.25 percent from 4.75 percent or 5 percent.
●$225,001 to $300,000: to 5.5 percent from 5 percent.
●$300,001 to $500,000: to 5.75 percent from 5 percent or 5.25 percent.
●$500,001 and above: to 5.75 percent from 5.5 percent.

Exemption reductions

For single filers, on income of:

●$100,001 to $125,000: to $1,600 from $2,400.
●$125,001 to $150,000: to $800 from $1,800.
●$150,001 and above: to zero from $1,200 or $600.

For joint filers, on income of:

●$150,001 to $175,000: to $1,600 from $2,400.
●$175,001 to $200,000: to $800 from $1,800.
●$200,000 and above: to zero from $1,200 or 600.

Since income is taxed in brackets (i.e., the last dollar made is taxed at a different rate than the first,) the net effect here will be between zero and 0.5% depending on your income.

I think it's a stretch to claim any hardship if your tax on $125K goes up $62 + loss of $800 exemption = $862.
On a $1 million income, the increase would be $3,187 + loss of $2,400 exemption = $5,587. Again, hardly a hardship.

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Response to bluestateguy (Reply #1)

Thu May 17, 2012, 10:26 AM

5. Going from 4.75 to 5.00% for a single person earning $100 grand is a hardship?

I don't think so. And the cost of living is high in the DC area but $100 grand is still a pretty nice income for a single person.

Note that this keeps more Maryland tax money in Maryland as well because state taxes are deductible on the Federal return. This is important because Maryland ships a lot more money to the Federal government than it gets back.

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Response to bluestateguy (Reply #1)

Thu May 17, 2012, 10:49 AM

7. Same here. nt

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Response to bluestateguy (Reply #1)

Thu May 17, 2012, 12:59 PM

15. It is one quarter point

on money earned over 150,000 per couple after deductions. it won't add up to much on the lower end at all. If you earn 200,000 after deductions, that is one quarter percent of 50,000. That is $125 per year more. Spread over 12 months that is $12.50 a month.

on edit: According to an above post it my a be half a percent which would mean another 25$ a month rather than 12.50. For a couple earning 200,000 that is not a big deal!

Bravo O'Malley and the Maryland Dems!!

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Response to alp227 (Original post)

Thu May 17, 2012, 09:49 AM

4. This is going to land hard on Feds

Lots of GS-13s are going to get hit by this in an area with sky high costs

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Response to ProgressiveProfessor (Reply #4)

Thu May 17, 2012, 10:32 AM

6. And they live in Maryland because it has good schools, roads, and other services.

You get what you pay for. Most GS-13s know that.

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Response to yellowcanine (Reply #6)

Thu May 17, 2012, 10:50 AM

8. There are a lot of Federal facilities in MD too

As for good roads and schools, you clearly have not been to Southern Maryland where the USN has a large installation at PAX river.

Historically, GS-13 wages have been a floor for higher levels of taxation in the national capital region

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Response to ProgressiveProfessor (Reply #8)

Thu May 17, 2012, 11:03 AM

10. wrong about the GS-13 thing and taxes

even a couple of GS-13 earners would be minimally effected.

but if that's the meme you'd like to get started, i'll help point it out so that everyone knows you'd like them to believe it.

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Response to ProgressiveProfessor (Reply #8)

Thu May 17, 2012, 11:21 AM

12. I have been in Southern Maryland. I work there. I will take the roads in S. MD over the roads in

VA or my GAWD, Pennsylvania or just about anywhere else. Yeah, Rte 4 is a crappy commute if you are heading north in the morning and south in the afternoon. But that is not because Rte 4 is not a good road. It just has too much traffic on it at certain times. It would be a lot worse if the SHA were not spending a lot of money on upgrading intersections in Calvert County, building Park and Rides, and subsidizing commuter buses and vans. And Calvert County has very good schools and the state as a whole has better schools and roads than VA. Yes there are Federal facilities in MD, partly because of location but also because MD has paid attention to not just K-12 education but also higher education, both community colleges and 4 year colleges. So there is a well educated work force which attracts employers. That stuff costs money too. Frankly I get a little tired of the people who move out to rural areas to get lower taxes and housing costs and then complain about the lower level of services, the lack of shopping opportunities, and the commute. You get what you pay for.

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Response to yellowcanine (Reply #12)

Thu May 17, 2012, 11:50 AM

13. I lived in Calvert too...

The school district was regularly being sued for ADA violations and we got real tired of being told that we were new and just did not understand how things were done. I have a fair amount of horror stories about Calvert County schools including racial.

Maryland community college costs at the time were higher than Univ of California, the UM campuses even more so. UC has been closing that gap recently.

Rte 4 is indeed a well planned and maintained thoroughfare, but many of the lesser roads are not. A while back there was an article in the WaPo a while back about how the accident rates in Southern MD were higher, especially for younger drives due to blocked sight lines and such. That is what happens when you pave the horse trails.

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Response to ProgressiveProfessor (Reply #13)

Thu May 17, 2012, 02:07 PM

16. Well now Calvert County gets high marks for its schools. Doesn't mean there aren't problems.

As for costs at UM and the community colleges - someone thinks it is a good deal because they are applying to get in there in droves.

And on the horse trails, I really disagree. There are some narrow roads but I grew up in PA and still get back there some. There is simply no comparison. Lots more two lane main roads and back roads with no painted lines. Same is true in rural Virginia where my sister in law lives. They don't even pave a lot of the horse trails there - just spread some gravel on them.

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Response to ProgressiveProfessor (Reply #4)

Thu May 17, 2012, 11:02 AM

9. Most GS-13's won't get any increase, the highest paid ones perhaps $50/year

GS-13 pay goes from 85k to 112k in DC.

But maybe you'd like people to believe something false about the story.

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Response to CreekDog (Reply #9)

Thu May 17, 2012, 11:10 AM

11. Actually outside of the NCR, they get a locality adjustment, including PAX

As the Federal workforce ages, many people are at the top of their bands, especially GS-13s.

That MD is going away from what has been the historical norm is noteworthy. Not saying it isn't needed.

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Response to ProgressiveProfessor (Reply #11)

Thu May 17, 2012, 12:46 PM

14. My numbers included the locality rate...since you're being pedantic, why are you getting this wrong?

getting it wrong in all the same direction?

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Response to ProgressiveProfessor (Reply #11)

Sun Jun 24, 2012, 09:04 PM

18. Those numbers include the adjustment, and we're still talking a quarter of one percent. (nt)

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Response to ProgressiveProfessor (Reply #4)

Sun Jun 24, 2012, 08:17 PM

17. can feds avoid the tax by putting more into TSP?

Looks like this new tax is on taxable income. If you made just over $100K and were to start or increase the pre-tax funds going into your TSP so your taxable income was just under $100K, could you keep more of your earnings?

SZQ

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