Reply to Shocker, MD Income taxes to increase

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]What an odd way to characterize the governor's budget proposal.

Governor’s budget proposal to include tax cuts and ‘growth agenda’ spending

Moore: 82% of people will see a cut or no change in taxes; corporate tax rate would also be cut

https://marylandmatters.org/2025/01/14/governors-budget-proposal-to-include-tax-cuts-and-growth-agenda-spending/[/quote]

but yet my taxes will go up plus a surcharge on capital gains. They just love losing wealthy residents to VA. At some point, who will stay? There is zero incentive to stay in MD when VA is 5 min from my house.[/quote]

This makes the difference between tax rates in MD and VA quite large. The top rate in VA is 5.75%, in MD the top rate will be 10.7% after this bill passes. The top income tax rate will be almost double after that of Virginia after this law passes. A law firm partner making 2M pre-tax, will have a take home pay of 1.067M in Virginia. In MD (MOCO) their take home pay would only be 995k. Many highly compensated professionals will be interested in moving right across the river to increase their disposable income by more than 7% (6k per month). [/quote]

Then they should do so.[/quote]

So you want high earning households to leave the state? The people who already pay most of the taxes? The problem with taxing high net worth people is that they tend to be much more mobile than lower earning people or middle class people. Anyone working in DC can easily just jump across the river and save their moving costs in just one year. And a huge chunk of Maryland's high earning households are in the DC suburbs.

Raising taxes on 18% of the state households while claiming to cut taxes on 2/3s (average cut is under $200) will be interesting, politically. I'd thought Moore was a 100% dead cert lock for reelection but not so sure any more. A Hogan equivalent could swing enough voters from that 18% demographic to win. Hogan ran and won on no more taxes following the O'Malley administration that saw steady tax increases and fee increases for everything and backtracking on his pledge not to raise state college tuition (which had been one of his key attack platforms against the previous republican governor). Keep in mind that Moore has already raised a lot of fees like car registration fees (which shot up enormously).

People can jump in and say they won't move, but I don't care about individual claims. Following the aggregate outcome will be very telling and interesting. We have ample evidence from other states, including Massachusetts, that saw wealthy households move out of the state following tax increases so those revenues never materialized as predicted. And we will see how people make their housing decision going forward, including people moving into the DMV (already ample evidence VA is gaining those residents over Maryland) and up and coming families make their preference when they grow out of DC for the suburbs. Aggregate numbers are important, not individual stories.[/quote]

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