Maryland Tax Increase

[Anonymous]

Anonymous wrote:Now that trump wants to cut everyone's federal taxes, that presents an opportunity for Wes to collect more MD taxes now that everyone's paycheck is getting bigger!

He might say he wants to but he hasn't and probably won't (unless you are a tipped worker). What he has cut is federal services to states, which will then need to be covered by increasing state taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I figure once we cancel FEMA and states stop subsidizing red states disasters it’ll go down.

This. And red state taxes will increase substantially.

Id rather pay more taxes and stay in Maryland; I've lived in several southern states and we get so much more for our taxes in MoCo.

Yeah, but realistically the choices here are MoCo, PG, HoCo, NoVA or DC. I think it is more economical to live in DC or NoVA - better house appreciation and more services for middle to upper middle class. Will prob sell house in Bethesda and retire to DC or NoVA condo. Will miss community in Bethesda.

[Anonymous]

Those taxes are going to make it harder for MoCo to compete with Nova. Plus MD’s estate tax is structured in a ridiculous way that they should have fixed (it counts a dollar in an IRA the same as a dollar of stock even though a dollar of 401K is already being taxed quite a bit).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I figure once we cancel FEMA and states stop subsidizing red states disasters it’ll go down.

This. And red state taxes will increase substantially.

Id rather pay more taxes and stay in Maryland; I've lived in several southern states and we get so much more for our taxes in MoCo.

Yeah, but realistically the choices here are MoCo, PG, HoCo, NoVA or DC. I think it is more economical to live in DC or NoVA - better house appreciation and more services for middle to upper middle class. Will prob sell house in Bethesda and retire to DC or NoVA condo. Will miss community in Bethesda.

Retried people pay very few taxes so moving while retired not as helpful. Maryland does not tax SS, and first 40K out of pension or 401k each year starting at 65 is tax free. And with new SALT rules you can deduct Maryland Taxes on Fed return.

[Anonymous]

Anonymous wrote:Those taxes are going to make it harder for MoCo to compete with Nova. Plus MD’s estate tax is structured in a ridiculous way that they should have fixed (it counts a dollar in an IRA the same as a dollar of stock even though a dollar of 401K is already being taxed quite a bit).

Maybe that is why a few people on my block transferred in Moco transfered title to home to kids. My "new" neighbor from back in 2019 who was like 35 and had two young kids magically got the home from parents when they downsized. I am sure at a cheap sale price and pre-run up. Now it is worth 2 million. I have seen that happen 3-5 times in my area. I wonder if over estate threshold which is 10 million for a couple. It is five million per person.

Very very very few people have over 10 million when they die and even way way less if they transfer title to primary home and beach house and do max tax free $38,000 a year gifts to kids. If you pay some estate tax you were most likely the super wealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Those taxes are going to make it harder for MoCo to compete with Nova. Plus MD’s estate tax is structured in a ridiculous way that they should have fixed (it counts a dollar in an IRA the same as a dollar of stock even though a dollar of 401K is already being taxed quite a bit).

Maybe that is why a few people on my block transferred in Moco transfered title to home to kids. My "new" neighbor from back in 2019 who was like 35 and had two young kids magically got the home from parents when they downsized. I am sure at a cheap sale price and pre-run up. Now it is worth 2 million. I have seen that happen 3-5 times in my area. I wonder if over estate threshold which is 10 million for a couple. It is five million per person.

Very very very few people have over 10 million when they die and even way way less if they transfer title to primary home and beach house and do max tax free $38,000 a year gifts to kids. If you pay some estate tax you were most likely the super wealthy.

It’s $5M but unless both spouses die at exactly the same time you end up inheriting money from one parent at a time and if one parent leaves money to the other, then effectively you have a $5M estate tax for a couple. No one in our family has ever lived in MD but one of my parents moved there for her last year of life to be in same assisted living facility as an old friend and we didn’t know about this estate tax until we were hit with it (our MD financial planner never mentioned it, which is another story).

[Anonymous]

Aren't DC estate taxes just about as bad as Maryland's?

As far as I can google, estate taxes contribute less than 1% of total tax revenue in both Maryland and DC. Have they thought this through? Richer people planning ahead will tend to leave the state to avoid the estate tax, so the state forgoes the bigger juice from the other tax revenue (income, sales, property) they could have received from these individuals.

[Anonymous]

Anonymous wrote:So you make more than $500K a year? That's the only bracket that is affected and the surcharge is only if you make more than $350K. Cry me a river.

Without taking a position on this, let us know whether you think tax increases are exogenous to economic productivity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Those taxes are going to make it harder for MoCo to compete with Nova. Plus MD’s estate tax is structured in a ridiculous way that they should have fixed (it counts a dollar in an IRA the same as a dollar of stock even though a dollar of 401K is already being taxed quite a bit).

Maybe that is why a few people on my block transferred in Moco transfered title to home to kids. My "new" neighbor from back in 2019 who was like 35 and had two young kids magically got the home from parents when they downsized. I am sure at a cheap sale price and pre-run up. Now it is worth 2 million. I have seen that happen 3-5 times in my area. I wonder if over estate threshold which is 10 million for a couple. It is five million per person.

Very very very few people have over 10 million when they die and even way way less if they transfer title to primary home and beach house and do max tax free $38,000 a year gifts to kids. If you pay some estate tax you were most likely the super wealthy.

It’s $5M but unless both spouses die at exactly the same time you end up inheriting money from one parent at a time and if one parent leaves money to the other, then effectively you have a $5M estate tax for a couple. No one in our family has ever lived in MD but one of my parents moved there for her last year of life to be in same assisted living facility as an old friend and we didn’t know about this estate tax until we were hit with it (our MD financial planner never mentioned it, which is another story).

It actually transfers the 5 million one spouse to the other. You had a weird thing with just one parent moving into maryland? That was issue. My wife and I both MD residents it is 10 million. Even if one goes first. But why did they declare MD residency in first place?

[Anonymous]

Anonymous wrote:Aren't DC estate taxes just about as bad as Maryland's?

As far as I can google, estate taxes contribute less than 1% of total tax revenue in both Maryland and DC. Have they thought this through? Richer people planning ahead will tend to leave the state to avoid the estate tax, so the state forgoes the bigger juice from the other tax revenue (income, sales, property) they could have received from these individuals.

they don't do that till almost dead and retired. And someone new buys house anyhow. And some people like me moved from even higher tax states to MD. My neighbors from NJ and NY who now live in MoCo paid even higher taxes pre-move. So not like I can just move back there.