Seeing Red In Maryland

The Local Tax in Maryland

Once upon a time (before tax year 1999) the way to calculate your local (county) tax on the Md. tax form was to multiply your state tax by a provided percentage. It was popularly known as the "piggy-back" tax. For the counties in the central part of the state, the percentage was generally 50%, although in the last few years some of the counties had upped it to 55%.

Starting in 1999, we were given a very small decimal number to multiply against the actual taxable income. Nice way to hide increases in the local tax - if you give them a small four-digit decimal rather than a two-digit percentage, fewer people will remember year-to-year what it was last year.

So, in honor of "tax day", I sat down and figure out how much the current local tax would look in piggy-back format. Using taxable incomes of 10-, 40, 70-, and 90-thousand dollars, I came up with the following percentages

• Anne Arundel: 60.4 - 54.5%
  
• Baltimore Co.: 66.7 - 60.3%
  
• Baltimore City: 71.9 - 65.0%
  
• Carroll: 71.9 - 65.0%
  
• Howard: 75.5 - 68.2%
  
• Montgomery: 75.5 - 68.2%
  
• Prince Georges: 75.5 - 68.2%
  

The surprising thing to me is that the local tax is actually regressive! The higher income the lower the tax percentage. This is almost shoking in a Democrat-controlled state like Maryland. I almost wonder if the Legislature knows about this. (And I hope no one tells them.)

posted by Mike Milligan @ 6:44 PM