BALTIMORE (WBFF) — Tax Day may be over, but a new report shows Marylanders are still paying a larger share of their income in taxes compared to most Americans.
A recent WalletHub study ranked all 50 states based on “tax burden,” which measures the share of personal income residents pay in state and local taxes, including income, property, and sales taxes.
According to the report, Maryland ranks as the 7th highest-taxed state in the country, with residents paying nearly 10% of their income toward those taxes.
Local economist Anirban Basu said the findings reflect what many Marylanders already experience.
“We know we’re highly taxed people,” Basu said.
He says Maryland’s tax structure, including state and local income taxes, contributes to the higher burden.
“When you hear that we’re taxing people more aggressively as a fraction of their income than in New Jersey then you say, we’ve gone too far here,” Basu said. “We need to offer some relief, a better value proposition.”
The WalletHub study uses data from sources including the Tax Policy Center to compare tax burdens across states.
Basu warned that higher taxes can have broader economic impacts.
“What this means is more restaurants close, more stores close, home prices don’t rise, so people’s equity does not grow,” he said.
He added that rising costs could push residents and businesses to leave the state.
“If Maryland wanted to collect more in taxes, it should actually lower some of these tax burdens, invite more people in, invite more businesses in, and invite more private investment,” Basu said.
The report comes as Small Business Administration Administrator Kelly Loeffler visited Maryland this week, announcing federal tax cuts and raising concerns about tax policies in some states.
“I think it comes down to making sure that you’re doing things to reward your citizens’ hard work, not punishing it,” Loeffler said.
Maryland lawmakers approved several new taxes and fees last year, including taxes on items like tires and certain technology services. This year, lawmakers did not pass new tax or fee increases, which critics attribute to the election cycle.
However, the state faces a growing budget deficit that is projected to triple in the next three years.
Basu warns that could lead to more financial pressure on taxpayers.
“The worst is in front of us the fiscal shortfall next year is going to be massive,” he said. “Marylanders are in for a tough time. We’ve got to change our strategy.”
Basu said lawmakers will need to find ways to lower costs to make Maryland an affordable place to live.
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