Maryland General Assembly considering ‘millionaire’s tax’ extension

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A coalition of Democratic senators in the Maryland General Assembly have proposed $827 million in tax increases, including the extension of the state’s so-called millionaire’s tax, in their Maryland First plan.

The 6.25% income tax rate, which expired this year, is controversial, for it led many of the state’s wealthier state residents to move to neighboring states offering better tax advantages, according to critics. If lawmakers approved the plan, the tax would be imposed on this year’s earnings.

The state, facing a $1.6 billion budget deficit, is looking at ways to restore funds or cut expenses. Gov. Martin O’Malley, also a Democrat, submitted a budget proposal that included no tax increases, but has said he would consider any tax increases to pass in the General Assembly.

The senators – Brian Frosh, Karen Montgomery, Jamie Raskin of Montgomery County; Paul Pinsky of Prince George’s County, Jim Rosapepe, who represents Anne Arundel and Prince George’s counties, and Delores Kelley of Baltimore County — also suggest increasing the state gas tax by 12 cents a gallon, alcohol by 10 cents a drink and cigarettes $1 more per pack, according to media reports.

The new taxes would add $100 million to health care funds, as well as generate $360 million for road and transit work, $227 million for pensions, $140 million for education.

The proposal did not sit well with some local officials, including Montgomery County Executive Ike Leggett, who told the Washington Examiner of the “disproportionate” number of millionaires in the Greater Washington, D.C. area.

“That would be troublesome for Montgomery County,” Leggett told the Examiner. “I would be very reluctant about any tax of that sort.”

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