Maryland's Progressive "Do Loop" on Taxes
Spanish Philosopher, George Santayana Had It Right
The Maryland Legislative Progressives are hard at work figuring out how to raise your taxes—somehow and someway - during the fall special session. While redistricting issues will be the primary focus, increasing user fees, gas excise taxes and a possible sales tax have been percolating beneath the surface as a way to bring much needed revenue. Likely absent from this session, unfortunately, will be frank conversations about how to make Maryland a business-friendly state, which if it were done, would be the best way to increase the likelihood of more businesses, lower unemployment and ultimately more funds to the state treasury.
Earlier this year, legislators had floated the possibility of increasing the gas excise tax in Maryland, with gas soaring around $4.00 a gallon. Currently, Maryland has the 16th highest excise tax in the nation at $.23 ½ a gallon, or $.48.7 a gallon when combined with the federal excise tax, according to a May 2, 2011 study done by the American Petroleum Institute. While an outright excise tax may not be considered during this session, there have been conversations about the possibility of “placing a tax on the distributor” which would not make it noticeable, at least initially to the Maryland consumer, according to one lawmaker. But the tax would be passed on to the consumer.
This is indicative of Governor O’Malley and his regressive legislative team’s lack of understanding Economics 101 and the ripple effect that higher gas prices have on other sectors of economy. As a Social Worker, I have witnessed first- hand, the struggle of those most affected by higher gas prices and its affect on their ability to pay rent and put food on the table. Their distress is palpable as they recount their stories, which sometimes includes a new adventure –going to Social Services for food-stamps.
During the special legislative session in 2007, lawmakers passed legislation increasing the sales tax in the state by 20%, which took effect in 2008. On face value, a penny more on each dollar spent may not seem like much to the average consumer, but on big ticket items for the poor it makes a huge difference. Now there are discussions about possibly increasing the sales tax again, most notably at this point amongst lobbyists, according to Republican Delegate Warren Miller.
Even Montgomery County Senator, Richard Madaleno recently discussed the possibility of a sales tax or gas tax increase in this special legislative session during a town hall-wrap up in Montgomery County. Unfortunately, he is not the only democrat alone in this summation. In the eloquent words of President Ronald Reagan, “they (the liberal progressives) never met a tax they did not like.”
These self-proclaimed leaders have abdicated their responsibility to manage the people’s money. Maryland State lawmakers are still spending too much, as reflected in the FY 2012 budget, which increased from $33.1 billion last year to $34.1 billion. Republican Delegate Susan Aumann noted, that “the unprecedented downturn in the economy dictates that we eliminate excessive spending, which is what Republican lawmakers tried to do this past session.” Without the benefit of a two party system, Maryland Republicans have a difficult time reining in spending by the Democrats
During this special legislative session, Maryland lawmakers should be looking at ways to improve Maryland as a business-friendly state to increase employment and revenue to the state treasury. Our “progressive” state ranks 44th in the nation in terms of creating a business-friendly environment (a drop from being ranked 25th in FY 2006). This ranking, according to the 2011 State Business Tax Climate Index put out by the Tax Foundation, was based on comparing corporate taxes, sales taxes and individual taxes among the states. Our neighboring states are considered to be more business friendly, and not surprisingly, ranked higher. One can cite the loss of Northrup Grumman which located to Virginia, instead of Maryland. Why is the Democratically-controlled legislature and executive branch not looking to increase Maryland's competitive and business-friendly environment, instead of trying to increase taxes and regulations that penalize the success of residents and businesses in our state?
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Fewer businesses, means fewer employed, which in turn leads to lower tax revenue. The result? Increased demands from our elected liberal progressive officials to raise user fees and taxes to counter the unnecessary and expensive programs that they have enacted into law. This “do loop,” in addition to continue legislative mismanagement of the state budget will result in more corporations and taxpayers fleeing our state and more hardship for the less fortunate. Have we not learned from other states’ mistakes, (i.e. New York, California) as well as our own? As the philosopher, George Santayana stated, “those who cannot remember the past (or choose to ignore it?) are condemned to repeat it.
Sandy Tuttle
MCGOP CONVENTION!