Montgomery Legislators Work to Moderate Proposed Income Tax Hike

According to the Washington Post, Montgomery legislators are leading the effort to moderate the impact of a proposed income tax hike by making the new rates less progressive than originally proposed by Gov. Martin O'Malley:

Legislators from Montgomery, home to more high-income earners than any other county, raised concerns about O'Malley's proposed overhaul of the state's income tax brackets. The governor's plan, aimed at making the brackets more progressive, would provide a modest tax break to most households but require the state's top income earners to pay several thousand dollars a year more.

Many members of the Montgomery delegation told Busch that they would not support the governor's proposal unless a compromise is reached to reduce O'Malley's proposed 6.5 percent rate for the top bracket, said Del. Brian J. Feldman (D), chairman of the Montgomery House delegation, the state's largest.

"If they were to put a plan out there for a vote that does not reflect some of these concerns, frankly there are quite a few members of the delegation that would likely vote red on the board," Feldman said.

House Majority Leader Kumar P. Barve (D-Montgomery) said the county's lawmakers will use their clout in both chambers to protect Montgomery's interests. "We're willing to work towards a sensible common ground," he said.

For weeks, Montgomery lawmakers and county officials have questioned O'Malley's proposal, saying it places an unfair burden on taxpayers and threatens the county's broader economic interests. Montgomery residents also pay a local income tax of 3.2 percent. A top combined state-county rate of 9.7 percent would exceed the top rates in Virginia and the District.

Montgomery County Executive Isiah Leggett (D) unveiled an alternative plan last week that would tax high-end earners at 5.5 percent. At a hearing last week, the Maryland Chamber of Commerce said some business owners have said they might relocate their businesses to Northern Virginia from Montgomery if the governor's tax plan becomes law.

"The risk of unintended consequences is very high," Feldman said. "Even members who believe that progressivity is a good idea are concerned."

One Baltimore Democrat dislikes the package even more than his Montgomery colleagues. James Brochin (D-Baltimore County) has threatened to join Republicans in an attempt to filibuster it.