Montgomery County Executive Marc Elrich is pushing back on a proposal that is likely to be approved by the County Council this week that would raise income taxes for higher earners and lower them for others.
The council took a straw vote Friday in which six of its 11 members endorsed the tax hike as an alternative to two recommended by Elrich.
“While some may characterize this action as a rejection of all of my tax increases, they are simply proposing a different type of tax increase: one I fear is far more regressive,” Elrich said in his weekly video message to constituents on Friday.
His criticism focuses on what council members bill as a cost-saving measure to offset reductions in income tax revenue.
As part of its tax plan, the council would eliminate the county’s income tax offset credit, which is currently set at $692. Homeowners who claim their home as their principal residence are eligible for the credit.
“I cannot stress this enough — the Council’s action only raises taxes on homeowners,” Elrich said in Friday’s message. “Commercial properties are untouched under the Council plan — homeowners absorb the entire cost.”
The council’s plan would raise rates by 0.1% for residents with annual incomes greater than $150,000.
Under the plan, this group would pay a 3.3% income tax. The current income tax rate for all residents is 3.2%. The plan would also lower income taxes for residents making $150,000 or less annually. Those making $50,000 or less would pay 2.7%, and those making $50,001 to $150,000 would pay 3%.
In March, Elrich recommended an $8 billion operating budget that calls for a roughly 6% property tax hike and a 0.1% income tax increase. Most council members voiced concerns that his plan would overly burden residents affected by jobs cuts and rising prices.
The council’s Government and Operations Committee proposed the alternative to Elrich’s plan Friday as a compromise — a way to raise revenue without raising taxes on financially burdened residents. But it only works by eliminating the homeowner tax credit.
“Moving to a progressive income tax actually means we have a loss of revenue,” said council member Kate Stewart, who chairs the committee. “In order to be able to move us in that direction and be able to work on this budget, the committee looked for how we could offset that loss of revenue.”
Friday’s vote is nonbinding, meaning council members could change their minds. The council will take a final, binding vote on Wednesday to set the county’s income tax rates.




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