CHRIS EDWARDS, CATO INSTITUTE
Baltimore is in the news for its poor economic situation and lack of opportunity for many of its residents. The problem may be that taxes are too high.
The District of Columbia government produces an annual study comparing state-local taxes on hypothetical households at five income levels in the largest city of each state plus D.C. The study includes state and local sales, property, individual income, and automobile taxes. The chart below shows annual taxes paid by Baltimore households compared to the average of the 51 cities in the study.
At every income level except the lowest one, Baltimore’s taxes are at least 46 percent higher than the average of the 51 cities. Indeed, Baltimore has the 3rd highest taxes of the 51 cities at every income level except the lowest one. Income taxes and property taxes are particularly punishing in Charm City.
At every income level except the lowest one, Baltimore’s taxes are about twice as high as some of the lowest-tax cities in the study such as Seattle. Twice as high! What are city officials doing with all that money?
Chris Edwards is the director of tax policy studies at the CATO Institute and editor of www.DownsizingGovernment.org. He is a top expert on federal and state tax and budget issues. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.