Moving forward in the wrong direction
When Governor O’Malley formally called the recently-completed Special Session back on May 3rd, he did so because there was “too much at stake not to move forward.” Unfortunately, after passing $260 million of tax increases and shifting the state’s teacher pension burden to its counties, it doesn’t appear Maryland workers will be able to respond accordingly. In fact, 6,000 fewer Maryland workers were contributing to the economy at the end of April than at the beginning, according to Labor Department figures released today – a statewide job loss which was the highest in the nation. Moreover, the March numbers were readjusted in a manner which gave the state a net job loss in that month, too.
(continued at Examiner.com…)
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Odds and ends number 48
I suppose you can call this the post-election edition because a few of these items were swept aside in the runup to our primary earlier this week.
This one’s a bit controversial.
It’s only 37 seconds and while it makes a great point, I find it intriguing that the “dislikes” are running 2-1 over the “likes” on YouTube. Truth hurts? Any questions?
One thing we can’t question is the fact that as of Sunday the United States had the highest corporate tax rate in the developed world. But the Republican Study Committee makes a good point:
Of course, volumes and volumes of special credits, deductions, and loopholes mean similar companies often pay very dissimilar tax bills. It’s natural for people and businesses to use every means available to hang onto the money they earn. We wouldn’t be an entrepreneurial nation if we didn’t. But the more time and money we spend navigating our ridiculously complex tax code, the less we produce of real value.
And that was part of the point in the Cain video. Not only is the tax rate high, but those who can afford lobbyists and campaign contributions tend to be the ones who pay the least in taxes – meanwhile, the mom and pop operation takes it in the shorts again. (That’s why 9-9-9 appealed to me. Any questions?)
The state of Maryland doesn’t get this either, according to Kimberly Burns of Maryland Business for Responsive Government.
As the Governor said himself, all this proposal does is delete the word ‘gas’ from ‘tax.’ A sales tax increase is an easy, unacceptable short-term fix to the longer term problem of business competitiveness. Just like the gas tax, it hits every Maryland working family and business right in the wallet.
Say hello to more factory outlet stores near Maryland’s borders in Delaware and Virginia. When you’re a small state like Maryland, sandwiched between two low-tax states, it’s foolish to think increasing the sales tax won’t effect Maryland’s competitiveness and the behavior of consumers.
If the 7% sales tax is passed – and remember, anything is possible in these desperate last days of the session – Maryland would have one of the highest sales taxes in the country and Delaware merchants will be licking their chops as their price advantage jumps to seven percent.
Maryland Republicans in the Senate point out another misconception on the offshore wind boondoggle by citing a Sun letter from Teresa Zent which makes an interesting charge: that $1.50 per month price is only “a cap on what a developer can plug into its proposal. It is not a cap on what a ratepayer might actually have to pay.” And that’s a tremendous point, because if your electric bill is figured on a price of perhaps 11 cents per kilowatt hour and wind energy will cost a quarter per, someone has to pay and the utilities (which, remember, have a monopoly on servicing a particular area) aren’t in it to lose money. By necessity, Maryland would be stricken with a further competitive disadvantage in electrical costs.
And while the election is over, I have to commend the participants in the U.S. Senate nomination battle for the campaign which was waged. They differed on issues, but when it came to attacking the opponent that was reserved for the real opponent, Ben Cardin. And even those weren’t personal but focused on how Cardin is out of touch and lacking in leadership in fighting for Maryland’s working families.
So it wasn’t unexpected that the two leading contenders released statements in this vein after the counting was done. Rich Douglas conceded thusly:
I want to congratulate my opponent on a hard-fought race in the Republican primary. Republicans and Democrats challenging Ben Cardin know that defeating elite royal family rule in Annapolis and incompetence on Capitol Hill is an enormous undertaking. I urge like-minded Democrats and Independent voters to close ranks with Mr. Bongino to replace Ben Cardin in November. It is time for a strong Maryland voice to be heard in the U.S. Senate. Today was the first step toward that goal.
Meanwhile, Bongino praised his opposition for the races they ran:
I am grateful to the voters of Maryland who have given me this amazing opportunity. I would also like to thank the other Republican challengers. We all share the same concerns about the direction of this country and agree it is time Maryland had new representation in Washington. I hope they will join my campaign to bring an outsider’s perspective to the US Senate.
Dan also set himself up for November, promising a campaign devoted to “the economy, national security, energy and government accountability.” He also added:
The people of Maryland deserve a Senator who will fight for them, and not the Washington establishment. We need leadership in the Senate that will work to increase opportunity for middle-class Americans, that will provide a path for those in poverty to advance and ensure this nation will once again be a place where jobs are created and people are willing to invest.
Part of doing that will be encouraging entrepreneurs and small business by making the tax code simpler and fairer instead of what the Cain video depicted.
Lastly, some laughed when Newt Gingrich spoke about bold initiatives in the space program, as he did last week. But the Competitive Enterprise Institute posited a step even beyond mere space travel: private ownership of other celestial bodies?
A proposed law requiring the United States to recognize land claims off planet under specified conditions offers the possibility of legal, tradable land titles, allowing the land to be used as loan collateral or an asset to be sold to raise funds needed to develop it.
Such a law would vitiate the 1979 Moon Treaty, which does outlaw private property claims in space, but to which the U.S. is not a signatory. This should be viewed as a feature, rather than a bug. The law would not impose any new costs on the federal government, and would likely generate significant tax revenue through title transaction fees and economic growth from new space ventures carried out by U.S. individuals and corporations. It would have great potential to kick the development of extraterrestrial resources—and perhaps even the human settlement of space—into high gear.
It’s quite a fascinating report, and it points out the difference between development in similar areas deemed off-limits to private property (Simberg cites Antarctica as an example of government-controlled property) where little development is occurring, as opposed to the far northern reaches of the planet where several companies are exercising mineral rights. He theorizes that billions of dollars could be made if private property rights were granted in space, and I can’t disagree.
I’m not going to be the first in line to be a space tourist or worker, but if opening up space can help the economy and promote future prosperity for succeeding generations, what are we waiting for?
Bonus research
I was writing something the other day as a possible addition to another venue, and in doing the research kept the link on my bookmark bar for future reference. Well, as it turns out I didn’t need the extra research for the other piece but I wanted to make my point on the subject. So here are more of my thoughts on the prospect of an additional Maryland gasoline tax – something I originally visited in January.
The two pieces I found were comparisons – one being the current gasoline tax table provided by the Tax Foundation which shows Maryland’s gasoline tax rate is currently tied for 29th among the 50 states. The second is an older comparison table that I found, and the reason I wanted it was to determine where Maryland’s gasoline tax ranked among its peers when it was adopted in 1992. (I couldn’t find 1992, but figured 1994 was close enough.)
It’s quite telling to me that back in 1994 our state had one of the highest gasoline tax rates, with only a handful of states charging more: Connecticut, Montana, Nebraska, Nevada, Oregon, Rhode Island, and West Virginia. Worse yet, only Montana, Nevada, Rhode Island, and West Virginia charged more tax on diesel fuel. In 1994 our taxes were a full 30% higher than the national average, but because states have began to add various other fees and local tariffs we remain above the average insofar as excise tax is concerned but slightly below the mean in overall taxation per gallon. Apparently 20 years is long enough and we have to break out of the pack and lead the country once again.
Since several states now add various amounts of sales tax to the price of gasoline at the pump, it’s difficult to accurately say just where Maryland would rank if gasoline prices were significantly higher or lower than they are today should they adopt Governor O’Malley’s idea of an additional sales tax phased in over three years. But it’s obvious we would be paying more at the pump regardless of the price – even if Newt Gingrich could get gasoline back down to $2.50 per gallon that’s still an extra 15 cents per gallon, or around $2-3 per fillup depending on tank size. At $4 per gallon the fee goes up to perhaps $4-5 for every tankful.
(Note that there’s also a number of alternative plans being floated around for a straight per-gallon excise tax increase, which would make the impact more easily gauged. Adding 15 cents per gallon, as one proposal advocates, would put us just a tick behind North Carolina as the highest-taxing state in terms of excise tax.)
Regardless of what proposal to increase fuel tax is adopted, when combined with the additional tolls being charged by the Maryland Transportation Authority at their facilities (including the Bay Bridge) the cost of getting around via car will certainly jump. By next summer driving across the state from Cumberland to Ocean City and back on a 12-gallon tankful of gas each way may well cost $15 extra in taxes and tolls alone from the price in 2011 – before the new tolls were adopted for the Bay Bridge and other MTA facilities.
The stated reason for the increases are quite simple: the state claims it doesn’t have enough money for road and bridge construction. Yet the MTA toll increases spared the Inter-County Connector and gasoline taxes tend to come down harder on rural residents who have to drive farther to work and shopping. In sum, they tend to serve as a wealth transfer from rural to urban dwellers, particularly in the Washington metro area because the ICC tolls did not go up. Moreover, the tendency for gasoline taxes to be spent on mass transit provides a further shift in prosperity from rural to urban; one particularly galling when a mostly empty train or bus goes by.
The main reason the state “needs” this tax increase, though, is to patch over the holes created by several administrations by raiding the Transportation Trust Fund (TTF). It’s an art which has been perfected by Martin O’Malley because he wasted the $1 billion-plus raised by a series of 2007 tax increases Democrats rammed through the General Assembly on a program of further spending rather than simply addressing the vital functions the state is supposed to provide. So now he and Annapolis Democrats are coming back to the people of the state with hat in hand begging for more, and promising this time they’ll “protect” the TTF. Well, I want the protection first, and a number of bills in the General Assembly deal with this. Unfortunately, Delegate Norm “Five Dollar” Conway and Senator Edward Kasemeyer don’t seem to have much desire to move these bills. But I’ll bet they’ll move that gas tax along in a hurry.
It’s quite likely that over the next few years our gas prices will either be going up at an accelerated rate or not dropping as quickly as they could because the state of Maryland will take a larger bite from our wallet through the gas tax. Maryland doesn’t seem to want to be a national leader in anything except loony liberalism and high taxation, and the controversy over highway funding provides another perfect example.
Odd and ends number 45
Thanks to Dan Bongino, who I spoke to the other night at our Lincoln Day Dinner. As he reminded me, I am now on number 45 in this occasional series of short items I grace with a paragraph or three.
So how about I start with an item involving him?
You probably don’t know the name Mia Love, but perhaps you should. The Utah Congressional candidate endorsed Dan with this statement:
“I first learned about Dan when he was being covered for a segment on Fox News. I was amazed by his story and the passion he has for the state of Maryland,” said Mia Love. “If we are going to change the way Washington operates, we need to start by electing folks like Dan Bongino.”
So I’m sure you’re thinking, well, that’s nice. But take a look at her website and read this piece of her life she shares therein:
On the day of Mia’s college orientation, her father said something to her that would become the ethos for her life:
“Mia, your mother and I never took a handout. You will not be a burden to society. You will give back.”
Consider that she’s born of Haitian parents and is a minority conservative Republican with a sound track record in her home state, and the strategy of this endorsement makes much more sense.
But there’s other endorsement news out there as well. This particular one shakes up the Sixth District race a bit, as former Senatorial hopeful Jim Rutledge eschewed endorsing one of the better-known candidates in the race and instead backs the underdog Robert Coblentz, calling him “a concrete conservative who understands the core principles and values that make America great.”
Perhaps that’s not a complete surprise, though, as Coblentz was the coordinator of Jim’s campaign in Washington County in 2010. Still, it gives him a little bit of gravitas in his uphill battle against more well-known candidates, and politicians have to start somewhere.
Returning to the Senate race, candidate Rich Douglas has been scoring media points with a couple appearances over in western Maryland. He called out Ben Cardin for not taking a stance on the gas tax during Alex Mooney’s WFMD-AM radio show Sunday evening, saying “I haven’t heard a peep from Ben Cardin (on the gas tax). There’s one simple way he can make his position known – go to a microphone and say what it is.” It also gave Mooney a free shot at Rob “Gas Tax” Garagiola, who’s changed his stance on the issue since he decided to run for Congress in the Sixth District. “These politicians all look out for each other,” added Douglas.
Rich was also featured in a Cumberland Times-News story by Matthew Bieniek on Friday where he echoed some of his job creation arguments presented Saturday at our Lincoln Day Dinner:
Job growth is Douglas’ priority and he doesn’t think the current administration in Washington, and U.S. Sen. Ben Cardin, are doing enough to bring new jobs to Maryland and the nation.
“The unfavorable business climate is a major factor. … Congress has a duty to remove obstacles to success,” Douglas said. A senator should be out there promoting Maryland as a business destination, he said.
A strategic, comprehensive vision for the nation’s economic future is needed, he said. The current “salami slice approach” isn’t working, Douglas said.
Obviously Douglas is covering the state quite well, and the strategy of using local media may pay off come April.
Bait and switch
That Governor of ours, he is a slick one.
After hearing from Martin O’Malley for several months before the General Assembly session that we should have a increase in the gasoline tax, the flush tax, or a host of other tax and fee increases, Governor O’Malley instead chimed in his support for the second sales tax increase of his tenure. Certainly we’re no stranger to sales tax increases as the tax on alcohol went up 50 percent last summer, from 6 cents per dollar to 9 cents. It’s almost like he floated the other ideas as trial balloons in order to make the “added flexibility” of a sales tax more palatable.
“I think we should remember that no one in our state lost their house, lost their job, or lost a business because of an additional penny on the sales tax,” O’Malley whined in speaking with reporters. Maybe he should come to Salisbury and ask local business owners about the effects of the sales tax when compared to tax-free Delaware. His assertion may be technically correct, but certainly we’ve seen many lost opportunities with the differential between what we can charge and what can be charged in Delaware.
Not enough to tax?
After raising the cigarette tax in 2008 and the alcohol tax last year, a public health advocate (read: lover of big government and the nanny state) wants to jack up taxes on cigars from their current 15 percent rate, according to a recent Washington Times story by David Hill. Vincent DeMarco also spearheaded the unnecessary alcohol tax increase which took effect earlier this year.
I find it interesting that the angle DeMarco uses to justify yet another sin tax is teen smoking. Apparently cigarettes are now too expensive for teens to purchase – thanks to the additional taxes – so they are embracing cigars instead. DeMarco is quoted in the Times, “Anything that is going to stop young people from smoking is a good thing.” Well, sir, I have news for you – raising taxes on cigars and other tobacco products won’t work for that intended purpose. But you’ll certainly extract more money out of those adults who choose to smoke.
Taxes and Keystone
So, President Obama wants to extend the payroll tax cut. Okay, said House Republicans, but we’re going to create a whole bunch of jobs with it by giving the green light to the Keystone XL pipeline.
I’ll let Andy Harris pick things up from here:
“Americans need the truly ‘shovel-ready’ jobs and economic investment that the Keystone XL Pipeline will provide,” said Rep. Andy Harris (MD-01). “The plan that the House majority has introduced is an excellent compromise that will extend tax cuts to the middle class, create tens of thousands of jobs, and will help secure America’s energy future. I am deeply disappointed that President Obama has promised to veto this bill to extend tax relief to our citizens over the Keystone pipeline provision that actually creates jobs without spending a dime of taxpayer money while lowering the price of gasoline and diesel as well.”
Yes, President Obama is threatening to veto the measure. So much for compromise.
Either one of the two points below would then be true. Come to think about it, maybe both are:
- President Obama doesn’t really want to create jobs. Well, perhaps he doesn’t unless they happen to be either government jobs or positions in an industry he favors. But I have news for the President: there aren’t any green jobs; shoot, right now there aren’t many jobs period. Or:
- President Obama really has no desire to cut taxes. To be honest, this tax cut he gave out was relatively insignificant to working families. But he certainly wants to lower the boom on more successful working families by increasing the taxes for couples that make over $200,000.
I’ll grant that the Keystone XL pipeline probably won’t do a whole lot for our local economy since it will run through several states in the Midwest. But the additional oil supply will help us in the long run by stabilizing gasoline prices, as Congressman Harris points out.
But if we do elect a new President next year, I hope Congressman Harris – assuming he’s re-elected, for which he’s an odds-on favorite at the moment – will begin to advocate solutions for our tax code which are more permanent and will begin the process of weaning the government off an income-based tax collection. Ramping up a consumption-based tax, as Herman Cain proposed with his economic plan, would serve this purpose.
Electing conservatives isn’t enough – we need to elect those who have the courage to act. Whether you like President Obama or despise his policies as much as I do, the one thing you can say is that he acted in trying to get his agenda done. We may only have four years to undo the damage he did, although I suspect that if a true conservative succeeds Obama he (or she) will have a full eight years to make a difference. But we’ll all have to roll up our sleeves and get to work – something sorely lacking with the Obama regime.
And now for something completely different:
The first of six opening round tilts in my best local blog poll is over, and the first semi-finalist will be Right Coast Conservative.
After a strong start, Julie Brewington’s site saw a rally from the Shorebirds’ blog which placed it ahead for a time. But much like their team’s performance in 2011, the Shorebirds site couldn’t hang on in the late innings as a strong push from RCC readers carried Julie’s site in the end. Right Coast Conservative received 143 votes and moves on, while the Delmarva Shorebirds Blog gathered 66. The Pocomoke Public Eye did not receive a vote.
The second round is up now, and it has an interesting draw to be sure.
Odds and ends number 36
Let’s begin with an item that only gets a couple paragraphs because of the circumstances. While I’m not at liberty to share the names of those who applied, I think I can safely say that we have no shortage of applicants to send four qualified prospects up to County Council in order to fill the District 4 seat made vacant by Bob Caldwell’s passing. Offoceseekers are both male and female, represent a broad spectrum of ages, and should be very interesting to screen. So that seat will be in good hands.
Now I could have had a great scoop in releasing the names but I respect the wishes of my Chair and the process too much to let any undue influence sway the decision, a circumstance which would certainly occur if the names were made public. Remember, this is not a typical political campaign because we as a Central Committee only make recommendations. The time for voting will be later and it will be done by County Council, not our committee.
All right, now for something a lot different.
‘Buffett Rule’ = unintended consequences
Really – how dumb does President Obama think we are? He’s playing that old tired class envy card again.
His latest scheme goes like this:
Middle-class families shouldn’t have to pay a higher tax rate than millionaires and billionaires.
So President Obama has proposed the “Buffett Rule,” which would require the wealthiest Americans to pay a tax rate at least as high as the middle class. Republicans are already calling this “class warfare,” and they will fight this plan with everything they have.
Yeah, that will do wonders for investment and job creation. So I don’t call it ‘class warfare’, I call it ‘sheer stupidity.’
The ‘war on the Shore’ – another shot fired across the bow
I’m not sure that our Congressman needs to be involved in this; then again I’m sure he’s going to be affected when his EZPass becomes more expensive.
But Andy Harris will be holding a press conference tomorrow afternoon in Stevensville to talk about “the proposed 320% Bay Bridge toll hike and other toll increases that will hurt Maryland families, Maryland businesses and job creators.” Included in that gabfest will be a number of Maryland legislators and local business owners who will be affected by the fee increases. I won’t be there, but it’s relatively predictable that Harris would come out against toll increases which may hit just about the same time the General Assembly is debating a gas tax hike.
Of course, the Maryland Transportation Authority defends the increases, citing an increased need for maintenance on aging infrastructure. But the problem is that we’ve been paying the tolls for years, yet Annapolis continues to raid the transportation funds to balance the overall budget – who says that trend won’t continue?
And this increase will affect three sets of people disproportionately:
- Commuters in Baltimore will have to pay more to drive through the Harbor Tunnel or over the Key Bridge.
- Tourists and north-south travelers along I-95 will be hit once they cross the Delaware line (or Susquehanna River.)
- The Eastern Shore, as both main arteries crossing the Bay in Maryland will see a toll increase.
Obviously the third one concerns us, especially those who chose to live on the Eastern Shore yet commute to work in Annapolis, Baltimore, or Washington, D.C. While the increase will be blunted for those who have EZPass it will still be a much larger monthly outlay. On the other hand, the drive between Baltimore and D.C. will remain as it is – even the new Inter-County Connector will be spared a toll increase. If you want to stay in the center of the state, well, these toll increases aren’t hurting you a bit (but you may reap the benefits.)
And as for the one reason I would support a modest toll increase (as opposed to 320%) – a third Chesapeake Bay span, but one closer to Salisbury? Well, apparently that’s not on the table as MTA is just trying to hold serve with fixing the stuff it has.
This will also serve to isolate the Eastern Shore further from the rest of the state, because who really wants to pay $8 to get across the bridge when almost everything else is readily available on the other side of the Bay? While it may not make or break a trip to Ocean City, it will adversely affect businesses in Queen Anne’s County, and a sampling of those business people will be stating their case at tomorrow’s presser.
Before the tolls take effect, though, there will be a series of public hearings beginning next month. Expect an earful from Eastern Shore residents who are tired of being considered the state’s outhouse when it comes to public policy decisions.
MoCo first – Maryland next?
This came to me from a source at the Washington Post who occasionally feeds bloggers interesting items:
The Montgomery County Council approved a 5-cent bag tax Tuesday that will go into effect January 1, a move environmentalists hope will revive a stalled effort to pass a similar tax statewide. The tax will apply to paper and plastic bags at thousands of merchants. Among the few exceptions are paper bags from restaurants and pharmacy bags holding prescription drugs.
Officials say the tax will raise about $1 million a year, some of which will fund free reusable bags for the poor and elderly. The money will also help fund cleanups of streams and rivers, although backers expect bag use — and tax receipts — to drop quickly.
Sadly, all but one member of the MoCo County Council voted for the additional tax. The lone dissenter, Nancy Floreen, stated “It’s just another regressive tax that (adds) to the cost borne by our most vulnerable populations.” She’s right about that, and I’ll bet I’m right in asserting there will be jobs lost because of the tax, which won’t just apply to plastic bags but to paper as well. If you figure 8 to 10 plastic bags per grocery trip, it’s another 40 to 50 cents extracted from the pocket of MoCo shoppers.
I’ve already discussed the state’s most recent effort to enact a bag tax, and of course those tax sponsors were thrilled to see Montgomery County take the lead on the issue. They figured it would make it more likely the state will pass a similar measure, either in this fall’s Special Session or next year in the regular meeting.
While the stated aim of the tax is to reduce the amount of bags available to clutter up the landscape, it wouldn’t be a MoCo measure without a wealth redistribution effort, as part of the proceeds will go to securing cloth bags for the poor and elderly. Do the elderly get carts to carry these heavier, larger bags too?
This will be a boon for one group, though – grocers and retailers in areas close by Montgomery County. That’s why the push will be on to make this tax statewide; we can’t have people escape taxation by moving around to more advantageous locations for shopping. It may not raise nearly as much as the recently-passed alcohol sales tax or the proposed gasoline tax, but again government wants to reach into our wallets and essentially make a loser out of a politically incorrect industry which serves a need.
Don’t forget: our local government may be thinking about a different revenue grab than the nickel per hundred property tax debated Tuesday night. Speed cameras are on their agenda next month so let me remind you what they’re really looking for. It’s all about our Benjamins, baby.
The hidden tax
My latest for PJM:
We all know what last Monday was. As many of us paid Uncle Sam’s toll – mine was almost a wash, which worked out about how I wanted it – one had either a sour mood in knowing that Fedzilla took more of our hard-earned salary or, conversely, that giddy feeling of having absconded with free money because a refund was due. (In many cases, though, that was just the money loaned to Beltway bureaucrats – interest free! Try finding a bank who will give you those terms!)
Yet we forget there’s a hidden tax which gnaws at our pocketbooks and the economy at large every day. It was pointed out by the Competitive Enterprise Institute in a report timed for release last Monday called ‘Ten Thousand Commandments.’
(Continued at Pajamas Media…)
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