Federal income tax rates range from 10 percent in the lowest income bracket to 37 percent at the highest bracket. At the state level, Maryland levies progressive rates ranging from 2 percent to 5.75 percent. This might suggest that the rich face substantially higher tax rates than the poor. Yet, a holistic examination of the income tax code reveals the opposite: Low-income households face the steepest tax rates, and Maryland makes it worse. What explains this counterintuitive trend? Means testing: a determination of whether a household is eligible for the full amount, partial amount, or none of a government benefit based on their income. For example, the Earned Income Tax Credit withdraws $21 for each $100 of earnings above $19,520, for parents with two children. This is equivalent to taxing that parent at a 21 percent rate. Either way, the
