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Some warn Gov. Moore’s tax plan may drive Marylanders to flee to surrounding states
Baltimore Sun, January 26, 2025
In his fiscal year 2026 budget proposal, Gov. Wes Moore has suggested increasing the income tax rate on the state’s highest earners. As a result, some of the highest earners (individuals with an adjusted gross income of $1 million or more) could see their combined state marginal tax rate reach as high as 10.7%. This includes a state rate of 6.5 percent, a local rate of 3.2 percent, and a 1 percent capital gains surtax. However, many experts and politicians are skeptical about the tax plan, expressing concerns that professionals such as physicians, business owners, and corporate executives would be significantly affected if the proposal is approved. This could potentially lead some residents to reevaluate their decision to remain in the state long-term. RESI Chief Economist Daraius Irani stated that one of the potential reasons that Maryland’s economy underperforms compared to the region is its higher taxes, particularly the corporate tax rate and associated fees, compared to neighboring states.
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