Did Ken Ulman just move into a higher tax bracket?
Posted by Ed C on Sunday, December 2, 2007
Well, he will have if he files as an individual. As reported in the Baltimore Sun (2.9% pay raises for Ulman, council set to go into effect)
Ulman’s salary increases from $147,000 to $151,263, while the County Council members’ salaries rise from $49,000 to $50,421.
With the new O’Malley tax plan, if Mr. Ulman were to file as an individual he would find himself in the new tax bracket designed for the “semi-rich” and face the new rate of 5.5% for income over $150,000. The really rich, as defined by the Maryland democrats get the privilege of paying 5.75%. (Gov. O’Malley proposed a top rate of 6.5%)
Did the MD democrats index these new income tax brackets to inflation? Did they learn anything from the AMT? When originally passed in 1969, the AMT was designed to target 155 “high-income” households.
Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.
Just as the failure to demonstrate a little foresight with the AMT, are we in a situation where those that think they are targeting only the “rich” will find that they also hit the “middle-class” over time?
But hey, don’t worry, we live in one of the wealthiest counties and states in America – We can afford it. (Especially if you’re an elected official with automatic, annual pay increases.)