Maryland GOP: ‘Told you so!’

Unfortunately, sometime awhile back I already used “in the category of ‘duh'” and I didn’t wish to use it again. But, surprisingly, the best-laid plans of Martin O’Malley and Free State Democrats didn’t work, and Maryland Senate Republicans didn’t hesitate to point this fact out:

Final tax data from 2008 now proves what many predicted but had been strenuously denied by Democrats in Annapolis: Maryland’s high income earners are voting with their feet.

In calling a special session for the purpose of passing an historic tax increase less than a year after his election, Governor Martin O’Malley changed Maryland’s personal income tax from a flat rate to a graduated system with a surcharge on high income earners. During this 2007 special session, Republican Senators opposed these tax increases and forewarned that the net result would be revenue losses as this mobile segment of the population relocated their primary residences.

Wall Street Journal editorial writers agreed in a May 2009 opinion entitled “Soak the Rich – Lose the Rich”  that described how the misguided budget policy of the O’Malley Administration would lead to outward migration of the very segment of the population that a state wants to keep for a healthy, progressive economy. In response, Democrats in Annapolis produced their own analysis attributing the loss of high income tax filers to the normal slack-off of annual returns.

Now the late filers have completed their returns and final numbers have been tallied. Instead of $106 million of new revenues predicted by O’Malley’s budget office, Maryland saw a decline of $257 million – for a total gap of $363 million. This is just part of the problem created by O’Malley that results in continuing out-year deficits over $2 billion each year.

It’s bad enough business is down for society’s producers, but then they get slammed with a tax increase and figure out that Maryland may not be such a green pasture after all. Why do you think that hundreds of professional athletes, entertainers, and the like live in Florida and Texas? (Hint: yes, the weather is nicer but there are places with even better climates.) Could it be the fact those two are among a handful of states which don’t have a state income tax? (The others are Alaska, Nevada, South Dakota, Washington, and Wyoming.)

I don’t know if they tried this again this session, but last year some Democrat geniuses tried to introduce a bill that would consider 3 months per year as enough time to qualify for Maryland residency for purposes of taxation. It didn’t go far, but this is how many Democrats think – they can’t bear to have anyone here making more that what they deem as a “fair share.” Playing the class envy card has gotten them this far so they aim for continued success.

In the last three years, we’ve all endured an economy which can best be described as a difficult one. Yet those who were affected by the “millionaire’s tax” are those who most likely still have the means to uproot themselves and move to more tax-friendly states like Florida and Texas. And guess who’s the loser? State government.

The state did just fine without a so-called “millionaire’s tax” as well as their other tax increases until Governor O’Malley came in and wanted to prime the state spending pump. (Governor Ehrlich did so as well with his final budget; until then his increases were relatively sustainable.) Throw in a larger share of federal dollars being required to maintain the state’s appetite for services and you have the situation we are in now. Imagine how Democrats must feel to be forced into the box of having to make cuts in an election year – think they’re not inwardly seething?

We have a choice in November. One choice is to take a hard look at what are priorities are and tailor a leaner, smarter budget to match. The other will be a repeat of 2007, where no tax increase will be taken off the table – we could see increases in the gas tax, income tax, sin taxes, sales tax (and services subject to it), and a whole multitude of other fees and levies.

Being a fiscal conservative, I prefer the former. But part of getting that will be looking past the class envy, a favorite divisive tactic of Democrats everywhere, and deciding it’s time to make a stand for maximizing our freedom.

Bunning’s last stand

A tired old man whose time is almost through decided to chuck popular sentiment and make a stand for principle. It sounds like the storyline for a hundred Hollywood movies, but this played out in real life earlier this week as Kentucky Senator Jim Bunning was castigated for cruelly holding up unemployment benefits and highway projects because he simply wanted to follow the rules he didn’t vote for, but was determined to hold the Senate to.

Obviously the gesture was a futile one – perhaps not as futile as managing my old hometown baseball team (yes, Jim Bunning managed the Toledo Mud Hens in 1974 and 1975 before going into politics and is the lone Baseball Hall of Famer to also serve in Congress) but the $10 billion fiscal measure to extend unemployment benefits another 30 days passed handily, 78-19. That vote added another $10 billion to the deficit.

Originally, Bunning simply wanted the $10 billion to come out of stimulus funds already allocated rather than creating new debt. Later, an amendment he sponsored would have taken away a tax credit for paper companies as a tradeoff to maintain the idea of PAYGO legislation (that lost 53-43 on a fairly party-line vote.)

The PAYGO legislation came about as an effort to sweeten the deal when Democrats wanted to raise the national debt ceiling to nearly $15 trillion. Republicans voted en masse against the amendment to add PAYGO but they lost and PAYGO became the rule along with the increased debt limit.

Yet Democrats rammed through two pieces of legislation by declaring them as “emergencies” exempt from the PAYGO rules and were well on their way to making this another case when Bunning made his stand. “If we cannot pay for a bill that all 100 Senators support, how can we tell the American people with a straight face that we will ever pay for anything?” asked Bunning.

For Congress to pay anymore than lip service to cutting the size of government, some hard decisions need to be made. Certainly there’s a humanitarian case for extending benefits, but that $10 billion comes out of the private sector or becomes debt for our ancestors (descendants, thanks Tim – d’oh!) to pay off. It’s simply an unsustainable system.

Unfortunately, not every Republican backed Bunning’s stance because Democrats are outstanding at playing the victim card and attempted to tar the entire GOP with the broad brush of being uncaring and unfeeling. Since Bunning isn’t running for re-election he had nothing to lose by taking a stand.

And I have nothing to lose by branding Democrats as hypocrites. They had yet another opportunity to stand by the rules THEY enacted yet to them the rules only apply to everyone else. At least the Republicans didn’t have that pretense of PAYGO legislation yet managed to balance the budget during the early years when they were in charge of Congress.

So I applaud Senator Bunning for his stand and would love to see him and fellow Republicans continue obstructing when they see the double standard for which Democrats are famous. They may have won this round but come November Democrats may regret what they’ve done.