According to the Tax Foundation Maryland is now 45th out of 50 states in their measure of business friendliness. This was a plummet rarely seen among the beancounters because our fair state was 24th last year – not great but tolerable. Perhaps that’s why businesses and jobs are fleeing the state? Maybe they’re going to Delaware (#10), Virginia (#15), or Pennsylvania (#28).
With the new rankings, the only states beneath Maryland now are Rhode Island at 46th, my native Ohio holding down 47th, California sitting at number 48, New York 49th, and New Jersey having the dubious dishonor of being 50th. Amazingly, no other state shifted more than 5 spots in either direction for this year’s rankings, making Maryland’s drop Grand Canyon-like in its scope.
I’ll let the Tax Foundation take it from here:
In the midst of an economy in decline that has led to revenue shortfalls in Maryland, the Tax Foundation and the Maryland Public Policy Institute will be holding a press conference tomorrow in Annapolis announcing that Maryland has made the largest decline in the State Business Tax Climate Index, sliding from 24th in 2008 to 45th in 2009 in the annual ranking of the “business-friendliness” of each states’ tax systems. The press conference will come before Gov. O’Malley presents a final list of proposed budget cuts to the Maryland Board of Public Works.
Tax Foundation Staff Economist Josh Barro, author of the study, will be at Lawyer’s Mall near the Maryland State House on Wednesday, October 15, to hold a press conference with the Maryland Public Policy Institute on the Index at 9 AM.
The Index ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment insurance tax and property tax. States achieve high scores by having low rates, broad tax bases, and simple rules.
Maryland’s drop from 24th to 45th out of 50 states on the Index is attributable to an increase in most of the state’s major taxes for FY 2009. They raised the corporate income tax rate to 8.25% from 7%, the sales tax rate to 6% from 5%, and the cigarette excise tax to $2.00 from $1.00 per pack. Maryland also created four new income tax brackets, raising taxes on filers earning more than $150,000 per year. The state’s top personal income tax rate is now 6.25% (up from 4.75%); that’s on top of a weighted average local option rate of 2.98%. Maryland now has by far the worst personal income tax in the country, with a significantly lower score than second-place California. (Emphasis mine.)
Being only a part-time blogger, I’ll have to take a pass on the press conference. All the Tax Foundation is really doing though is telling those of us in Maryland something we already know through experience – our taxes are too high! But Governor O’Malley and his Democrat allies in the General Assembly really don’t care because they’re assuming the federal government will replace any jobs that are lost in the private sector with both the growth of government and the importation of BRAC jobs from other states. Even better for them in the former case is the vastly higher proportion of unionized federal jobs when compared to the private sector – that means cash in their political coffers to beat back those pesky Republicans who have the audacity to believe that money earned by the citizens of Maryland actually belongs to them!
However, that thinking covers just the I-95 corridor where most of the beneficiaries of federal work and largesse live. Once you get away from the urban areas of Baltimore and DC you run into places where the statewide business climate makes it more difficult for job creators to stay in the state. Furthermore, with most areas of Maryland outside the I-95 corridor within a fairly easy drive to an adjacent state, the marketing strategy of a company which relocates can remain essentially the same.
I wouldn’t be surprised at all to see my e-mail tomorrow have a press release from the Maryland Republican Party outlining many of these same points being brought up by the Tax Foundation. I’m sure Justin Ready and others in the party stop by monoblogue so I’m happy to give them the heads-up if they haven’t already seen it someplace else.
And with the realistic possibility of Democrats expanding their majorities in Congress (why I don’t know given their single-digit approval rating as a body and horrible track record over the last 2 years under Nancy Pelosi and Harry Reid), it’s likely that we as a nation will be saying goodbye to the relatively reasonable tax rates of the last several years and dreading the return of the higher rates installed by President Clinton. (Remember the middle-class tax cut he didn’t deliver? Betcha Barack Obama will fall short there too if he’s elected.) In all, residents of the (not so) Free State may be continuing to absorb the body blows of oppressive taxation at the state level and getting that added sock in the mouth from the feds too.
And if we go to the canvas, it’s still a long count to 45.
Congrats on being #1 in Maryland 2 weeks in a row!
Hey Michael,
Why does Andy Harris’s new anti-Kratovil ad use the same footage of people saying “he’s too liberal” as the ad he ran against Gilchrest? Not similar ideas, mind you–it’s the SAME PEOPLE! Might it be that he is taking footage that was supposed to be about Gilchrest and deceptively using it against Kratovil? Nah, that would be dishonest! Look into it and tell me whether that level of dishonesty is what you really want to support. I can’t take credit for finding this, but I will darn sure try to let as many people know about this as possible. Harris is not the man you think he is, bottom line.
By the way, I found out that permission was granted by those people to reuse their likenesses and statements because they agreed the same was true of Frank Kratovil as it was for Wayne Gilchrest.
So it may have looked dishonest and I’m still not completely comfortable with it (after all, I could have provided some great footage too) but it turns out that there was no harm, no foul.
Bottom line: Andy Harris is still far better for the First District.
Michael,
Even if those people really did say those things about both candidates, it is still hard to swallow the Harris/Meekins attempt at deception. This on top of the “misquote,retraction,correction” attempt at deception/misrepresentation makes me way too leary of Harris. What else is he hiding or misrepresenting? I believe Kratovil sounds alot more trustworthy right now.
But here’s the other question you need to ask yourself. Who went negative first in this campaign? If Frank Kratovil is so proud of his views, why has he and the DCCC (who’s pumped almost $2 million into his campaign coffers) almost exclusively focused on Andy Harris’s so-called negative record?
Remember, it wasn’t Andy Harris who said, “What people wanna do is say what people want to hear.” That was Frank Kratovil, and he’s been the one who shifts positions with the political winds.