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1 Scott Drenkard, Maryland Considers Proposal to Extend Millionaires Tax to $100,000 Income Level 1 (2012)

handle is hein.taxfoundation/ffdabxz0001 and id is 1 raw text is: FOUNDATION , calIoc May 15, 2012 No. 301 Maryland Considers Proposal to Extend Millionaires Tax to $100,000 Income Level By Scott Drenkard Earlier this year, Maryland Governor Martin O'Malley proposed a number of tax proposals, including increasing income taxes,1 applying the sales tax to gasoline,2 raising cigar taxes,3 and doubling the flush tax, a septic system levy.4 Last month, despite the bevy of options that were suggested, the Maryland General Assembly failed to reach a revenue deal by a matter of minutes before the end of their session. What is traditionally a confetti- and balloon-filled final night celebration was replaced by a stern 1 AM press conference by Governor O'Malley.5 Since then, O'Malley has called a special session to begin on May 14 to discuss an income tax hike which could affect all earnings over $100,000. While specific details are still scarce, we will here review some of the options that were on the table at the end of the regular session and discuss impacts on Maryland's fiscal situation and national competitiveness. Budget Cuts and the Doomsday Fallacy When the regular session ended without a new revenue deal, many onlookers feverishly decried the austerity of the doomsday budget that took effect instead, which would cut $500 million in expenses over the next year. However, these doomsday cuts are actually applied to planned spending increases, and even under this doomsday scenario the budget will still increase by $700 million, or 2 percent over last year. 1 Joseph Henchman, Ma ryland Looking to Raise Income Tax on Middle-Earners, Tax Foundation Tax Policy Blog (Mar. 20, 2012), http:!itaxfoundationorgblogishowi2805 9htmnl. 2 David Hill, 0O'Malley springs sales-tax surprise on assembly, THE WASHINGTON TIMES, Jan. 11, 2012, http://wwwvwashingtontimes comnews/20 12/jan/i/omnalkey -springs-sales-tax-surprise-on-assembly/. SGeneral Assembly of Maryland, Department of Legislative Services, The 90 Day Report: A Review of the 2012 Legislative Session (Apr. 13, 2012), at B- 13, http://mnlis.state.mnd us/20 12rs/90-Day-rcport/The90DayReport.pdf. 4 osp Henchman, Maryland Governor Proposing Increases in Income, Sales, Gasoline, Cigar, and 'Flush' Taxes, TAX FOUNDATION TA POLICY BLOG (Jan. 19, 2012), http://tamfoundationorgblogshowx/2790 3.btml. 5Aaron C. Davis & John Wagner, Officials in Md. fail to vote on tax, casino bills, THE WASHINGTON POST, Apr. 9, 2012, http://w-A-.wa.shingtonpost. com/local/md-politics/md-Iegislature-scrambles-in-closing-hours-to-finmish-major-tax-an d-casino- bills/2012/04/09/pJQAKBI66S story.ltml.

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