About Stuart Levine

State Tax Issues

October 5, 2007--Maryland, My Maryland

The charge: Maryland has high taxes. Well, yes and no.

While Maryland ranks toward the top in total taxes per capita (at 14), it ranks toward the bottom of the states in taxes as a percentage of income (at 40). See here.

Maryland takes in 54 cents in taxes for every $10 of gross domestic product. The national average per $10 of gross domestic product is 54 cents. See here.

Overall, Maryland's tax system is fairly regressive and, in the period 1989-2002, actually became more regressive. See here.

Update--October 29, 2007

The Tax Foundation has statistics that, once you distill them, put Maryland's tax posture in even a better light. The key phrase is "distill," since the Tax Foundation wants Maryland's tax to appear as onerous as possible.

According to the Tax Foundation, Maryland ranks 23rd among the states in the state and local tax "burden." That is, Maryland's overall "blended" state and local tax comes to 10.8%, lower than the 11% national average. This is not bad considering that per capita income in Maryland is one of the highest in the country. That's why the "total" tax burden, adding the federal income tax burden to the state and local tax burden, pushes Maryland a little bit above the national per capita average.

The Tax Foundation chart is here.

Update--November 29, 2008

According to the Census Bureau, in 2007 Maryland ranked 16 in the amount of tax revenue that it raised. However, according to the Federation of Tax Administrators, as a percentage of personal income, Maryland was ranked 42nd among the states.

Since Maryland has a gross domestic product of $268.685 Billion (source: Bureau of Economic Analysis). Thus, Maryland takes in 56.1773 cents for every ten dollars of GDP. While this represents an increase from the figures cited above (which may have been from 2004), I cannot calculate how Maryland ranks among the states with respect to this measurement.

Update--December 29, 2008

Using figures from the Bureau of Economic Analysisfor state and Federal GDP for 2007 and from the Census Bureau for state taxes for that year, we find that, on average, all states had tax revenue equal to 5.4594319% of their GDP. Maryland's was somewhat higher at 5.6177989095037% of state GDP. That is, Maryland's taxes, as a percentage of GDP, were about 2.9% higher than the national average.

January 12, 2008--State Budget

Here's a chart of the Maryland State 2008 Fiscal Year Budget from Maryland Fiscal Year Budget Highlights:

2007-08 Md expenditures

changed December 29, 2008