Gov. Wes Moore's budget: Tax overhaul includes cuts and increases for Marylanders

Sam Janesch, The Baltimore Sun on Jan 15, 2025

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BALTIMORE — An overhaul of Maryland’s personal income taxes would give two-thirds of filers an average tax cut of about $173 while raising hundreds of millions of dollars more from those making more than $500,000 under a budget plan proposed Wednesday by Gov. Wes Moore.

The shift is aimed at filling a massive state budget deficit and making higher earners pay a closer portion of their total income compared to lower earners — and it will coincide with $2 billion in cuts that disproportionately impact funding for the disabled, education and child care scholarships.

The combination would increase spending overall by about 1%, though it would keep the state’s general fund about $300 million lower than last year as officials seek to resolve a $3 billion hole in the next budget year.

The tax code changes would include a consolidation of existing lower income tax brackets at slightly below 4.75% — the current rate for individuals earning up to $100,000 — while adding two higher brackets of 6.25% for those making at least $500,000 and 6.5% for those making more than $1 million. Under current law, the rate maxes out at 5.75% for those making at least $250,000.

The cuts would also come as a result of doubling the standard deduction and eliminating the ability for itemized deductions.

“Saying, How can we do this, where the majority of Marylanders are actually going to get a tax cut and do it in a way that can still repel and initiate growth, be more efficient in the way that we’re doing our government, more effective in the way we’re doing our government’ — that really kind of became those north stars for me as we were going through the process and as I came to the final decisions,” Moore said in an interview with The Baltimore Sun just before he publicly presented the plan.

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