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Council moves forward with progressive income taxes

In a split vote, the Montgomery County Council voted 6-5 Wednesday to move forward with a progressive income tax structure.

Budget deliberations are not done yet and will continue until the council takes final votes May 21.

New Tax Rates 

Currently, the county’s income tax rate is 3.2%. Under the proposal, the income tax rates will be:

  • 2.7% on income of $1 to $50,000
  • 3% on income of $50,001 to $150,000
  • 3.3% on income higher than $150,000

The Opposition 

Councilmembers Andrew Friedson, Evan Glass, Will Jawando, Kristin Mink and Laurie-Anne Sayles voted against the proposal.

Jawando said he thinks the county should raise the tax on people who make $150,000 or more per year. He wants it to be a “real progressive income tax” and not have to take money out of the budget.

He said his disagreement is with the decision to raise taxes for households earning at or below the county’s median income. Jawando said he proposed an alternative that kept the current 3.2% rate on income up to $500,000, and raised it to 3.3% only on incomes above $500,000.

Mink said she has not seen a proposal that gets the county to a place where the level of cuts to public schools is anything but “truly devastating.”

She has an alternative idea that includes a property tax increase, maintaining the $692 Income Tax Offset Credit and increasing income tax only for incomes at or above $300,000.

“I think that that is worthy of conversation,” Mink said. She pointed to the implications presented by the MCPS superintendent that were circulated Tuesday forecasting cuts to education as to a reason why she agrees that the county needs progressive tax structures.

The Support 

Council President Natali Fani-González says “if you agree with a progressive income tax, you need to start somewhere.”

“Saying no is not a solution. Saying no is not leadership,” said Fani-González.

County Executive Marc Elrich’s proposal was to raise the rate from 3.2% to 3.3% across the board.

“This council decided that that was not fair for low-income families,” Fani-González said.

She also proposed a progressive tax structure in which the income tax rate would range from 2.5% to 3.3% based on the adjusted gross income of a resident.

Councilmember Sidney Katz said that, even if someone was making $5 million, they would still pay less for the first $50,000. Then for the next up-to-$150,000, they still pay less for that amount, according to Katz.

“This is progressive, and it’s saying that everybody who’s paying whatever — the $50,000 or whatever — is going to pay the same amount even though you might be getting more than the $50,000 eventually,” Katz said.

Councilmember Kate Stewart said 50% of county filers make less than $50,000, while 75% make under $150,000 per year. So, 75% of filers in Montgomery County would receive an income tax break under the plan, she said.

“This is our opportunity to do a progressive income tax here in Montgomery County,” Stewart said.

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