In Fiscal Year (FY) 2013, Maryland collected $31.6 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Maryland taxpayer can afford this level of taxation.
As shown in Chart 1 below, Maryland’s state and local tax burden (tax collections divided by personal income) was the twenty-fifth highest in the nation for FY 2013 at 10 percent—this is -3 percent below the national average of 10.3 percent. As shown in Chart 2, Maryland’s tax burden has grown over time by 51 percent to 10 percent in FY 2013 from 6.6 percent in FY 1950.
Maryland’s slightly lower than average state and local tax burden is driven by a low property tax burden (2.7 percent, 35th highest), corporate income tax burden (0.3 percent, 31st highest), sales tax burden (1.3 percent, 43rd highest), and all other taxes burden (1.9 percent, 27th highest). However, Maryland does have a significant individual income tax burden (3.8 percent, 4th highest) that offsets the other lower taxes.
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Maryland—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.
The Maryland counties with the highest local government tax burden include: Garrett County, MD (9.2 percent), Worcester County, MD (9.1 percent), and Calvert County, MD (5 percent). The Maryland counties with the lowest local government tax burden include: Somerset County, MD (3.4 percent), Talbot County, MD (3.4 percent), and Allegany County, MD (3.4 percent).
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.