HEADLINES : Maryland

Governor O'Malley's budget raises taxes on Maryland's high-earners

The Washington Post | by Aaron C. Davis and John Wagner | January 18, 2012

Marylanders making six-figure salaries or more would pay higher income taxes to help cover the state's budget shortfall and rising teacher pension costs under a spending plan that Gov. Martin O'Malley is scheduled to release Wednesday.

Individuals who earn more than $100,000 and couples that make more than $150,000 would be limited to smaller personal exemptions for themselves and their family members, and they would face caps on personal deductions, according to several lawmakers briefed Tuesday on O'Malley's plan.

The income tax changes, along with another plan by O'Malley (D) to collect sales tax on some Internet purchases, would raise more than $300 million, covering about a third of the state's $1 billion shortfall in the coming year, lawmakers said.

They would also amount to the first broad-based tax increases in Maryland since 2007, when O'Malley pushed through a tax package that increased the sales tax to 6 percent, from 5 percent, and rewrote the state's income tax brackets.

 

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