Maryland Gov. Martin O’Malley gave Obama a thumbs-up on Thursday for pursuing an end to tax breaks for the nation’s wealthiest residents.
“A return to the Clinton-era tax rates for millionaires and billionaires is a fiscally responsible and necessary step to help put our country on solid footing for recovery,” O’Malley said following Obama’s press conference on Wednesday. “I commend President Obama for his leadership on this matter. What we need right now is to remain laser focused on creating jobs, not on protecting special interest tax breaks for the wealthiest 3 percent of Americans.”
O’Malley’s interest in the matter is not surprising — not only because he’s trying to build up a national profile, with increasing visits to Washington and particularly to the White House — but also because he has has some experience taxing his own wealthy residents.
In 2008, Maryland implemented a so-called “millionaire’s tax” that increased state taxes on residents earning more than $1 million by roughly 14 percent — from 5.5 percent of residents’ income to 6.25 percent.
The effect of the tax received mixed reviews: The following year, the number of “millionaires” — or people earning more than $1 million — filing tax returns in the state dropped precipitously, signaling that the state’s wealthiest residents were fleeing Maryland. O’Malley argued that the decline in millionaires’ tax filings was an effect of the recession, not the higher tax, and that the state needed the revenues to close a $1.7 billion budget gap.
Either way, the state legislature opted out of extending the tax after it expired in January 2011, even though Maryland was facing a $1.6 billion budget gap this year.
