State, local burdens among highest in nation
To localize the old axiom, there are two sure things in D.C.: Traffic and taxes.
And taxes. And taxes.
Taxes shelled out by Washington-area residents are among the highest in the country, and taxpayers scrambling to finish up their 2009 federal 1040 forms by Thursday’s deadlineare feeling the pinch.
The average D.C. resident paid $7,308 in state and local taxes in fiscal 2008 — higher even than residents of tony Connecticut,which was first among states at $7,007. Maryland was ranked fourth among states, at $5,669, and Virginia was ninth, at $4,669, according to a new report from the Tax Foundation, a nonpartisan tax research group in Washington.
Uncle Sam takes a hefty chunk out of people’s paychecks, too.
While Virginians pay a bit less than residents of D.C. and Maryland, Cliff Keirce of Loudoun County says people across the Potomac are still feeling the pinch.
“Some people can’t afford to stay here anymore,” he said. “I know it’s happening.”
Keirce, who works for the Federal Aviation Administration, said he is considering moving to another county with a lower property tax rate. Loudoun recently approved a property tax rate of $1.30 per $100 of assessed value, up from $1.245 currently.
Marvin Weinman, former president of the Montgomery County Taxpayers Union, sees a similar trend.
“There comes a point where you just can’t pay any more,” he said. “It’s not a pretty picture in Montgomery County for the next couple of years.”
Maryland’s richest county has a budget gap for next year that’s ballooned to nearly $1 billion. Like everywhere in the country, the county has been hit by the recession. But county officials say the state didn’t do Montgomery any favors when it raised taxes on millionaires from 5.5 percent to 6.25 percent in 2008.
In addition to a state income tax, Maryland also charges a “piggyback tax,” or a local income tax that goes toward funding for local governments. Montgomery, Prince George’s and Howard counties’ local tax rates are the highest in the state for 2009, at 3.2 percent.
“It just goes on and on and on,” said Dee Hodges, chairman of the Maryland Taxpayers Association. “If it’s just too high, people start leaving.”
Income and property taxes aren’t all. Cigarette excise taxes in Maryland and the District are among the highest in the country. And Virginians looking to celebrate finishing off this year’s returns would do well to be careful how they celebrate — the commonwealth’s spirits excise tax is third-highest in the country.
Still, some taxpayers say they’re willing to pay more, as residents have poured into public hearings asking local leaders not to cut services — even if it means higher taxes. A majority of Alexandria residents polled in the city’s annual survey last year said they would be willing to pay more in taxes to preserve services and maintain quality of schools.
It’s important to remember that Washington, with six of the top 10 richest counties in the United States, is a higher-income area, said Kail Padgitt, a staff economist for the Tax Foundation.
And with the expansion of government work, the region hasn’t been hit as hard by the recession as others, said Kim Rueben, a senior fellow at the Urban Institute, a nonpartisan public policy think tank.
Notwithstanding the area’s relatively high tax levels, there are many ways to measure the burden for the average citizen, said Ronald Alt, a senior research associate with the Federation of Tax Administrators.
“There is no one single measure that is going to claim one state is extremely [highly] taxed and one is tax paradise,” he said.
