Feb 11, 2015

In Fiscal Year (FY) 2016, Maryland collected $36.5 billion in state and local taxes—or $6,055 for every man, woman, and child. 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?

To better answer this question, this analysis will calculate Maryland’s Tax Burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

As shown in Chart 1, Maryland’s state and local tax burden (tax collections divided by private sector personal income) was the thirteenth highest in the nation for FY 2016 at 15.3 percent—or 7 percent above the national average of 14.3 percent.

#Maryland state and local #taxburden in FY 2016 was the 13th highest in the nation at 15.3%— 7% above US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #MDpolitics #MDleg #MDsen #MDgov #PolicyData (click to tweet)

As shown in Chart 2, Maryland’s tax burden has increased over time by 86 percent to 15.3 percent in FY 2016 from 8.2 percent in FY 1950.

#Maryland state and local #taxburden has increased 86% between FY 1950 (8.2%) to 2016 (15.3%) http://bit.ly/2FX9C8F @keypolicydata #MDpolitics #MDleg #MDsen #MDgov #PolicyData (click to tweet)

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

To put Maryland’s tax burden into perspective, let’s compare it to size of major industries in the state (as a percent of private sector income). As shown in Chart 3, Maryland’s 14.4 percent tax burden is greater than these combined industries: construction (6.7 percent), retail trade (5.2 percent), and accommodation and food services (2.9 percent).

#Maryland state and local #taxburden > construction, retail, and accommodation http://bit.ly/2FX9C8F @keypolicydata #MDpolitics #MDleg #MDsen #MDgov #PolicyData (click to tweet)

Maryland’s higher than average state and local tax burden is driven by higher taxes such as the individual income tax burden (5.7 percent, 3rd highest) and all other taxes burden (2.8 percent, 13th highest) which are partially offset by lower taxes such as the sales tax burden (1.9 percent, 9th lowest).

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.

Maryland’s local government tax burden by county/city are shown below (from highest to lowest):

• Garrett County, MD (16.6 percent)
• Worcester County, MD (13.4 percent)
• Somerset County, MD (11.6 percent)
• Baltimore (Independent City), MD (10.5 percent)
• Dorchester County, MD (8.3 percent)
• Allegany County, MD (7.4 percent)
• St. Mary's County, MD (7.4 percent)
• Kent County, MD (7.3 percent)
• Prince George's County, MD (7.3 percent)
• Harford County, MD (7.0 percent)
• Cecil County, MD (6.7 percent)
• Anne Arundel County, MD (6.5 percent)
• Wicomico County, MD (6.4 percent)
• Calvert County, MD (6.3 percent)
• Washington County, MD (6.2 percent)
• Howard County, MD (6.0 percent)
• Charles County, MD (6.0 percent)
• Frederick County, MD (6.0 percent)
• Queen Anne's County, MD (6.0 percent)
• Montgomery County, MD (5.9 percent)
• Caroline County, MD (5.7 percent)
• Carroll County, MD (5.7 percent)
• Baltimore County, MD (5.6 percent)
• Talbot County, MD (4.8 percent)

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?