Levies climb 40 percent, 24 percent in Fairfax
Taxpayers in Montgomery County will shell out 40 percent more in taxes than they did a decade ago, almost twice the increase that residents in Fairfax County, across the Potomac, will pay next year.
Residents of the region’s two wealthiest counties have seen their taxes climb on nearly everything they buy over the last 10 years, including clothes, houses, cigarettes, alcohol and the electricity that powers their homes.
| The income tax burden | ||||
| Income tax for a joint-filer household with net income of $150,000: | ||||
| County | Fiscal 2004 | Fiscal 2013 | State/local tax rate combined | Change |
| Montgomery | $11,925 | $12,300 | 8.2% | 3.1% |
| Fairfax | $8,625 | $8,625 | 5.75% | None |
| Selected state and local tax rates | ||||
| Tax | Montgomery | Change from fiscal 2004 | Fairfax | Change from Fiscal 2004 |
| Sales | 6% | 20% | 5% | 11% |
| Real estate/property | $1.103 per $100 assessed value | -3% | $1.075 per $100 assessed value | -7% |
| Vehicle | No tax | N/A | $4.57 per $100 assessed value | None |
| Cigarette | $2/pack | 100% | 2.5 cents/pack | 1,100% |
| Beer | 9% by 2014 | 50% | 4% | None |
| Source: Montgomery and Fairfax County governments | ||||
But Montgomery taxpayers are paying more.
Households there will pay an average $8,500 in local taxes in fiscal 2013, up 37 percent from $6,200 in fiscal 2004, according to the county’s Finance Department. Fairfax households will pay $1,200 more — a 24 percent increase from $5,000 in fiscal 2004 — in four major local taxes, according to Fairfax government data.
On top of local levies, Montgomery residents with taxable incomes of more than $100,000 will pay higher income taxes, while rates stay the same in Fairfax.
In Montgomery, households are paying 20 percent more in sales taxes on most goods — in addition to a new 5-cent tax to bag those goods — and about 250 percent more in energy taxes, which will average $140 in fiscal 2013.
Montgomery County Councilman George Leventhal, D-at large, said county taxes will continue to soar because of state requirements to increase education spending.
“We will have continued tax increases as far as the eye can see,” Leventhal said. “The state legislature has made more and more unsustainable commitments, and basically we have to raise taxes to keep up.”
Both counties are collecting more money through real estate taxes, which have dropped since fiscal 2004, but not by enough to outpace home values that skyrocketed during the housing bubble.
Fairfax’s real estate tax has dropped 9 cents per $100 of assessed value since fiscal 2004, yet homeowners will shell out 30 percent more next year in housing taxes, according to county data. A $450,000 home will cost Fairfax residents $4,840 in taxes next year, while the same house would cost Montgomery residents $4,960 in taxes.
Fairfax residents pay an additional personal property tax on their vehicles, equal to $1,371 annually before exemptions for a family with two cars worth $15,000 each. The car tax has remained static since 2004. Energy taxes, which can add up to $96 on heating and cooling bills, have not changed, while the sales tax has risen by a half-cent, bringing the total state and local sales tax to 5 percent.
Through taxes on real estate, personal property, sales and energy, Fairfax County residents are on the hook for an average $6,200 in fiscal 2013 county taxes, up from $5,000 10 years ago, according to the county government.
That doesn’t include state income taxes, which cost roughly $8,625 annually for a Virginia couple filing jointly who have a net income of $150,000. That couple in Maryland would pay $12,300 in income taxes: $7,500 in state taxes — up $375 from fiscal 2004 under the rate hike to 5 percent that Maryland lawmakers approved earlier this month — and the rest in county income taxes.
Virginia, which charges a 5.75 percent tax rate for singles and couples making more than $17,000, hasn’t raised income taxes in three decades. It does not charge an extra local income tax.
Maryland has twice increased income tax rates, including a two-year tax hike on millionaires that some economists believe drove many out of the state. Though the top tax rate is the same as Virginia’s, Maryland’s combination of state and local income taxes rank the state fourth in the nation, tied with the District. Maryland’s income taxes are so high that the Wall Street Journal editorialized about them last week, saying residents are “getting soaked.”
Fairfax County Supervisor John Cook, R-Braddock, said economic growth has enabled the county to keep most of its tax rates steady.
“Rates stay the same and it still generates more revenue because wealth is growing,” Cook said.
“We are more frugal with our government. We haven’t been afraid to make cuts in government services so that we could get through the recession without tax increases,” he said. “Maryland has chosen more in the way of tax increases.”
