O’Malley Shows Us His Shiny New Tax Brackets

Much thanks to Steve for this article, where Gov. O’Malley actually details the new tax brackets under his proposal. The current state income tax is 4.75% per person, to give you a point of reference, and so the new tax brackets would make it more of a progressive (more you earn, the more you pay) similar to the federal income tax. The brackets are:

Marriage penalty, a feature seen with the federal income tax, now gets to be introduced with the state if this get passed. The marriage penalty is the fact that you have to pay more tax as a married couple than if you were two single filers, something that I think makes absolutely no sense (it only makes sense to the people writing the checks drawing from the account our extra taxes go into).

Breakeven point at $165,000 for singles, $218,000 for married. Under the new plan, you would pay approximately $7,832.50 in taxes under the new plan and $7,837.50 under the existing tax structure as a Single. For all you married folks out there, at $218,000 combined income you’d be paying $10,351.25 under the new scheme and $10,355 under the existing tax structure. Those over the breakeven point will pay more and those underneath it would be paying less in terms of taxes. (please check my math!)

One of the other proposals that seems to bother people a lot is the introduction of slot machines. I don’t see the harm in that, especially all the revenue it would generate, but I haven’t looked into it in great detail. Ultimately, it’s just opening up a new revenue stream that the state can then spend irresponsibly.

What do you all think of this? Bear in mind that in Maryland we also have county taxes and those are around 3%, so before anyone claims we have low taxes, take those into account too.