Fuzzy Tax Math
As part of his rhetoric at the “kitchen table” unveiling of more details on new taxes, “Governor MOM” declared that 95% of taxpayers would save money under the new proposal.
First of all, the 5% who would pay more are, of course, the rich. I am not even going to go into the arguments as to why taxing the rich at a disproportionately high rate hurts precisely the poor and middle class people that people are trying to help, and instead focus on the fact that the 95% statistic is total balderdash in the first place!
(I recently learned that ‘balderdash’ is a synonym for ‘nonsense’, and I have been striving to use the word frequently.)
The current state tax code provides that all persons are taxed at a rate of 4.75% of income for all incomes over $3,000. Since almost everybody makes more than $3,000 per year, basically we all pay a 4.75% state income tax.
The new tax code makes some changes, but single persons making $15,000-$150,000 and married persons making $22,500-$200,000 still pay 4.75%!! The median household income in Maryland is about $53,000–this means that the average family is paying basically the same income tax!!!
AND, THIS IS ONLY THE INCOME TAX!! If you raise the sales tax by 20%, raise the gas tax by who knows how much, and expand the sales tax to include services–the real tax environment that we will be facing rears its true, ugly head.
In other words, if you keep income taxes basically the same, and increase every other tax, taxpayers will be worse off than before and will have less money to spend or save.
As Ron George says, “Only the governor could call a tax increase a tax cut.”