ANNAPOLIS, MD — If you make $500,000 or more, your taxes are going up, according to Governor Wes Moore's tax plan released Wednesday.
Republicans say this will drive out high-income earners.
"What happened with the O'Malley era millionaire's tax? We actually didn't gain any revenue. We actually lost high-income people who said 'I don't need to live in Potomac anymore, I can live in McLean Virginia,'" said Said Delegate Jason Buckel, a Republican from Allegany County.
Moore's plan adds two new brackets.
One at $500,000 of 6.25% and another at $1 million of 6.5%.
J.P. Kahel with Loyal Maryland says the new brackets may not be enough to drive people out of the state.
"This won't affect most Marylanders because most Marylanders aren't earning 500,000 or a million dollars. Those who are are going to see a modest increase to their taxes to the state, that means really one of two things, either they're going to stay here and pay more taxes or they're going to leave the state. Personally, I don't think these tax increases are big enough to merit that kind of exodus," said Kahel.
Senate President Bill Ferguson says the proposed rate increase is not out of line, though it could lead to some people leaving the state.
"Undoubtedly, there probably is some effect and the question is whether that is a significant or marginal effect," said Ferguson.
The plan also adds fees to things like deliveries, up from 0 to 75 cents.
The cannabis tax goes from 9% to 15%.
Kahel says those costs will get passed on to consumers.
"Yeah, I think in general any tax that is gonna get placed on a business is going to get passed to the consumer. The hope is that gets turned into better roads, higher quality light rail, better schools, so it's not that these taxes are getting vaporized, I would hope that there would be some return on investment in terms of social welfare," Kahel.
The tax plan isn't final and both the Senate and House get a chance to make changes before the governor can pass it.
