Maryland to Boost Virginia’s Competitiveness

The geese that lay the golden eggs are about to fly south, but not because winter’s approaching. Instead, greedy politicians in Maryland are seeking to impose California-style income tax rates on the state’s most productive people. Even some local Democrats realize this is going to be a boon for Virginia, where the top income tax rate will be about four percentage points lower.

The Washington Post reports on Maryland Gov. Martin O’Malley’s unintentional campaign to boost Virginia’s economy:

Gov. Martin O’Malley yesterday proposed the first major overhaul of Maryland’s income tax brackets in 40 years, offering what he called a “more progressive” system in which high-end earners would pay more.…

“We must be very cautious that we’re not asking people to go live in other jurisdictions, where taxes are not as high,” said Sen. Rona E. Kramer (D), chairwoman of Montgomery [County]’s Senate delegation. “Northern Virginia is a very appealing place, and it’s right across the river.” …House Minority Leader Anthony J. O’Donnell (R-Calvert) called the plan “a historic beating up on Marylanders through the income tax,” noting that the top marginal rate would increase by nearly 37 percent.

…Under O’Malley’s plan, Montgomery residents in the highest bracket would pay a combined state-county rate of 9.7 percent, which County Executive Isiah Leggett (D) said yesterday is “not acceptable.” …The combined rate of 9.7 percent would also exceed the current top marginal rates in the region. In Washington, the top rate is 8.5 percent; in Virginia, 5.75 percent; and in Delaware, 5.95 percent. Maryland would not be alone in imposing higher rates on upper-income earners. California, for example, applies a rate of 10.3 percent on incomes of more than $1 million.