Sun Supports County Income Tax Flexibility

The Baltimore Sun editorial board weighs in, supporting the state granting counties flexibility in creating income tax bracketing, to replace the current single rate.

Among topics gaining attention during and since MACo’s recent winter conference is an emerging conversation about the county income tax – currently set by State law at one flat rate applying to all taxable income, regardless of income level. Some county officials have argued that flexibility to create “brackets” like most income tax systems (including the federal and state taxes on Marylanders) would be a reasonable option to grant to county governments.

This week, the editorial board of the Baltimore Sun has staked out a position in favor of this approach. From their editorial:

This is a timely discussion not only because it’s a matter of basic fairness in the era of the Trump tax cuts, which disproportionately helped the rich, but also because the Kirwan Commission recommendations on education improvements are eventually going to require local governments to come up with hundreds of millions of dollars more for their share of increased school aid in the coming decade. Where will that money come from? Imposing higher income tax rates on the wealthiest citizens might prove an attractive option. And here’s the best part: Such a targeted approach could mean most of us would not see any higher taxes at all and some might even get a break. That’s right, a tax cut. That’s what happened during the O’Malley tax reform, and it could happen again at the local level as rates drop for lower income earners.

To create this local flexibility, state law must be amended by state legislation. Anne Arundel County Executive Steuart Pittman has indicated he intends to pursue such an effort in the 2020 session, and has begun working with other potentially interested jurisdictions. From coverage of that announcement, also in the Sun:

Current state law does not allow for a progressive tax, so Pittman’s recent tax hikes hit everyone — including that same portion of the population that struggles to pay for basic necessities.

“We had no choice, which is why we’re doing this,” Pittman said. “The state does not allow us to tax progressively.”

He said that if he has the ability to lower taxes on people who are struggling economically, he will.

Michael Sanderson

Executive Director Maryland Association of Counties
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