Regardless of whether the president and Congress strike a deal or take the nation headfirst over the "fiscal cliff," federal taxes for some Marylanders will increase next year — and under some scenarios the pain could be worse than in other states.
For the first time since a recession gripped the country in 2008, Maryland is approaching a General Assembly session with good news about its operating budget: Neither tax increases nor drastic budget cuts are likely to be needed.
High-earners in Maryland will feel a financial pinch beginning Sunday, when employers boost paycheck withholdings to accommodate higher income tax rates. The tax increase is one of hundreds of new laws taking effect with the July 1 start of the state's fiscal year.
The General Assembly's speedy embrace of Gov. Martin O'Malley's income tax increases this week cleaned up a political mess in Annapolis, but the rate hikes could come back to haunt the Democrat if he seeks national office when his time in the governor's mansion is up.
A carefully choreographed strategy to raise state income taxes to stave off so-called Doomsday budget cuts faces a challenge in the General Assembly after several Democrats defied party leaders with a proposal to raise the sales tax instead.
A Maryland family making more than $175,000 will pay at least $254 more in income taxes this year under a revenue-raising plan the Maryland General Assembly is expected to take up when they convene for special session on Monday.
In a letter to Maryland senators, Senate President Thomas V. Mike Miller says there's been "tremendous misinformation" circulating about the final day of the General Assembly session and insisted that he did not hold up a bill to raise income taxes over legislation to expand gambling.
General Assembly leaders reached tentative agreement Monday night on a state budget for the coming year and an income tax increase to help pay for it. But the full Assembly had yet to vote on the tax measure as the session's midnight end approached.
A lengthy roster of high-profile bills remains unresolved as the General Assembly begins what is supposed to be the final day of its 2012 session , including offshore wind power and the future of gambling in Maryland. But foremost, lawmakers are coming in Monday hoping they can pass a budget.
Pushing legislative brinkmanship to its limits, the General Assembly will go into the last scheduled day of its 90-day session Monday without an agreement on the one thing it must get done under Maryland's Constitution: pass a balanced budget.
A plan adopted by the Maryland Senate may be unique among the 50 states in how it would handle income taxes for high earners, and it would violate the principle that a dollar earned should not cost more than a dollar in taxes.
The state Senate voted Thursday to significantly raise taxes on Marylanders earning half a million dollars or more — prompting complaints that liberals were bent on launching class warfare in the state.
Determined to avoid deep cuts to state spending, a Senate committee voted Thursday to approve an increase of roughly one-quarter of a percent in Maryland's income tax rate and to shift part of the state's teacher pension costs to the counties, though at a more gradual pace than proposed by Gov. Martin O'Malley.