Governor O'Malley Announces Plan to Reform Maryland's Income Tax Structure; Makes Tax Structure Fairer for Working Families; 95% of Marylanders to Pay Less
O'Malley Outlines Plan during "Kitchen Table Talk" in Baltimore County
Governor Martin O'Malley announced a plan today to reform Maryland's income tax structure making the income tax fairer for working families in our State. O'Malley announced the plan at a press conference with County Executive Jim Smith after a "kitchen table talk" with Baltimore County residents at the home of Sarah Achenbach.
"Today, we are taking another step to get our fiscal house in order and close our State's $1.7 billion deficit, while making Maryland's tax structure more modern, inclusive and fair," said Governor O'Malley. "Under this plan, 95% of all Marylanders will pay less and we will reward work by expanding the Earned Income Tax Credit for working families."
"I respect Governor O'Malley's courage in offering a comprehensive solution to the state's structural deficit that has been the elephant in the room for the past five years," stated Baltimore County Executive Jim Smith. "Providing income tax cuts for 95% of Marylanders strengthens working families and the middle class all across our state."
Under the Governor's plan ninety-five percent (95%) of Marylanders will pay less and over 2.1 million tax-filers in Maryland will experience a tax reduction or no change in their income tax.
Under the Governor's plan, typical married filers earning less than $250,000 and singles earning less than $185,000 will see their income taxes reduced. Currently in Maryland, all taxable income above $3,000 is taxed at a flat rate of 4.75%.
The Governor's proposal allows taxpayers to pay a lower rate on taxable earnings up to $15,000 for single filers and $22,500 for married couples. The current tax rate of 4.75% would apply to earnings between $15,000 and $150,000 (single) and $22,500 and $200,000 (married). Two new income tax rates will be applied to taxable earnings in excess of these amounts, with the highest rate imposed on earnings above $500,000.
"I am happy to host Governor O'Malley and am grateful that he has taken the time to sit down and talk to me, my friends and neighbors to listen to our concerns and issues affecting us everyday," said Sarah Achenbach.
In addition, Governor O'Malley's plan expands the refundable Earned Income Tax Credit for working families to twenty-five percent (25%), rewarding work and assisting families having the most difficulty making ends meet. The expansion of the EITC will return approximately $33 million to working families across Maryland.
In Fiscal Year 2008, the State will receive an estimated $7.1 billion in individual income tax revenues, constituting 52% of general fund revenues.
Today's announcement is the first in a series of announcements where the Governor will unveil his solution to the State's $1.7 billion structural deficit.