Anne Arundel County Executive office sees potential positives in some additional taxation

Responding to the Anne Arundel County Chamber of Commerce's opposition to making changes to some county taxes, the county executive office's Director of Government Relations Peter Baron, related the office's position.

He said the current county income tax plan disproportionately negatively impacts those with smaller incomes, because it is a flat rate. Those with less income would be giving a bigger relative portion of their spending power back into government coffers. 

"It ends up being working class and middle class folks ending up paying more of their income," Baron said in a phone interview Wednesday night. 

He said the bracketed system would give a tax break to 98 percent of county residents. The one to two percent of residents who would be impacted are "best positioned to afford it," he said.

The new tax option, enabled by the state legislature, is available to all county governments in the state, and would have to be passed by the Anne Arundel County Council to be made law, he said. The highest county income rate possible through the option is 3.2 percent, Baron said.

And the bracketed system does not tax a wealthy residents income all at the same rate, he noted.

"It's important to remember even if you make $500,000 and we cut the rate for everyone who was making $250,000, your first $250,000 would also be taxed at that rate. You don't hit a new tax bracket and the entire amount is at that bracket."

If enacted by the county council, the option to put a surcharge on the real estate transfer tax would be 1 percent on real estate transactions of $1 million and more. Funds generated would go toward a county affordable housing fund.

The chamber does acknowledge that there is a serious affordable housing issue in Anne Arundel. A chamber criticism of that tax though, is that the surcharge's option exist even before the actual fund to collect it exists. Baron indicated that situation is a function of state law.

"I don't think that's a fair criticism," he said.

He did say that between five and seven percent of all real estate transactions in Anne Arundel County are for over $1 million.

The chamber is also opposed to a digital advertising tax that has been developed by Maryland. Baron said the county executive's office has not taken a position on that program.