But not a good name, especially for its business environment. From this morning’s Washington Post:
Maryland will begin implementing the largest tax increase in state history today, when higher tobacco, vehicle titling and corporate income taxes and sweeping changes to personal income tax rates go into effect.
The overhaul of Maryland’s tax structure, which became law in November after a frantic special legislative session, will generate new revenue to help solve the state government’s festering budget problems.
As the Post notes, pro-tax lawmakers and Governor Martin O’Malley decided to ditch the flat structure for the income tax. Under the new system — it’s a reform! — the former single rate of 4.75 percent on all taxable income above $3,000 has been replaced by higher rates on higher income earners. Post: “Under the new structure, single filers reporting more than $150,000 in taxable income and joint filers reporting more than $200,000 in taxable income will be taxed at gradually higher rates. The top rate of 5.5 percent will be applied to single and joint filers with taxable income of more than $500,000.”
Not a good way to encourage individual investment in wealth-producing activities, Maryland.
Meanwhile, five Republican lawmakers are trying to block the tax increases, accusing the Democratic leadership of conspiring to “conceal” constitutional defects in the rush to pass the tax hikes. Seems at first glance like a policy dispute being brought to the courts, almost always a bad idea. If Marylanders want to elect tax-raising legislators, well, that’s an informed policy decision for which they should bear the consequences for good or ill.
One bright note: The state sales tax increase, from five to six cents on the dollar, doesn’t go into effect until Thursday. So hurry up and shop!
And repent at your leisure.
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