Tax Break

Republicans and Democrats diverge on state taxes

By Patrick Temple-West
May 24, 2012

Under pressure from Tea Party lawmakers, Kansas Gov. Sam Brownback backed down on sales tax plan.

Whether your individual state taxes are climbing or falling, may have something to do with who’s in charge of your state capitol at the moment. Two states changed their personal income tax rates this month. Kansas Republicans cut taxes, while the Democrats in Maryland raised rates on the wealthiest.

Kansas lawmakers lowered income taxes earlier this week. The top rate was dropped to 4.9 percent from 6.45 percent. The overall cut to revenue collection went beyond what Republican Gov. Sam Brownback had initially proposed.

Tea Party Republicans in the state legislature successfully  pushed the governor to abandon higher sales taxes that would have offset some of the lost revenue.

Now Kansas stands to lose $800 million in 2014 as a result of the tax cuts.

Lawmakers in the Democrat-controlled state of Maryland went the other way. Earlier this month, Gov. Martin O’Malley signed a tax increase on individuals making more than $100,000 a year.

Maryland’s new top income tax rate of 8.95 percent becomes one of the highest in the country. The tax applies retroactively, meaning those effected will see high tax bills for the full 2012 tax year.

The issue won’t be going away. Later this year California voters will decide by referendum whether to increase taxes on individuals making $250,000 or more.

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