Tax, tax, tax, tax, tax!

To some, the size of government simply can’t be large enough to redistribute wealth to those they consider “disadvantaged.” Take the group Progressive Maryland, which I prefer to refer to as Regressive Maryland. In either case, they’ve once again combined with the supposedly nonpartisan Maryland Budget and Tax Policy Institute to produce their annual “State of Working Maryland” report describing their wet dream of social architecture and handouts to those they deem deserving.

In their report, they gasp that, “(t)he danger Maryland faces is that most of the gains of the economic recovery will flow to the wealthiest Marylanders.” Isn’t that generally the way those who assume the most risk by investing capital are rewarded? Meanwhile, they also complain that, “(m)ajor deficit reduction should not be on the table until the recovery is firmly on track, that is, until unemployment has dropped and is on a downward trajectory.” So we are supposed to place our children and grandchildren into deeper debt because economic conditions aren’t very good? Well, the problem seems to be that our vast debt is leading to the economic doldrums, folks! How much money shoveled at the problem is enough?

Among the number of charts and graphs enclosed in the report, I found the “Maryland Job Count in Selected Industries” bar chart on page 9 fascinating. It seems Maryland’s growth industries over the last three years are (wait for it) education, health services, and – of course – government! Conversely, those taking the biggest hit over that period are manufacturing and construction. Isn’t that what they want, more government workers? This should be paradise!

But the last five pages of the report are where the rubber meets the road – they need to pay for their grandiose schemes somehow. Their wish list includes digging into the pockets of Maryland people and corporations doing business in the state to the tune of nearly $3 billion. (Consider that the state’s portion of our annual budget – not including monies passed down from the federal government – runs around $13 billion.) Apparently the pointy heads who created this report feel that working Marylanders need to cough up a little more.

These are some of the taxation schemes they’re trying to enact, with the amount they are hoping to raise:

  • Extend the ‘millionaire’s tax’ which expires at midnight tonight for another three years, to raise between $70 and $90 million. That is, it would if any millionaires remain in the state – many have already fled to more tax-friendly places.
  • The ‘dime-a-drink’ tax on alcohol. They actually quizzed candidates on this one; unfortunately, those who favored raising the tax tended to win at the ballot box (many were unopposed.) So those who like their Bud longnecks, their glass of white Zinfandel, or shot of Southern Comfort will be helping the state supposedly raise over $200 million. Way to tax the poor and middle class.
  • Raising the gasoline tax by 15 cents a gallon to raise $450 million. The idea is twofold: get people to drive less and perhaps clamor for more mass transit. That’s not working here on the Shore; we just take it in the shorts. The same people who scream about oil companies making maybe 4 cents a gallon profit are the ones who want to deduct an extra buck or two on each tankful (on top of the 23 1/2 cents a gallon they already charge) because it’s been 18 years since the tax was raised. So? For some people it’s been 18 years since they could afford a new car, and this won’t help them a bit.
  • Combined reporting for corporations will supposedly raise between $92 and $144 million, based on 2007 numbers. Of course, the numbers for 2008 weren’t as favorable for the group so they didn’t use them, claiming the year was an anomaly because it “reflects a low level of profits at the depth of the recession.” Well, guess what – driving business out of the state is going to keep us in a recession. If Maryland adopts combined reporting, business will find another loophole. Trust me on this. Even the Maryland Business Tax Reform Commission, a body mainly hand-picked by the Governor and other Democrats, couldn’t support this turkey.
  • And now the biggie – expand the scope of the sales tax to include more services, for “Maryland taxes 39 of 168 services included in FTA’s survey of all states.” Yes, only 39 of 168 – that simply won’t do for them. This could raise up to $2 billion. Of course, they’re concerned about “(t)axation of basic household services (which) would disproportionately burden low-income households” but obviously they don’t give a crap about the average working family who will get hammered every time they order a pizza or pay their cable bill.

Of these five, I give the best odds of General Assembly passage to the ‘dime-a-drink’ tax, followed by the ‘millionaire’s tax’, expansion of the sales tax to services and the gas tax increase. I think the General Assembly will heed the advice of the MBTRC and not consider the combined business tax this year, and the gas tax will be a tough sell because pump prices have surged dramatically since this summer. This is confounding experts who usually see prices decline once the summer driving season ends and refineries can revert back to a less expensive blend of gasoline that’s not formulated to fight smog.

Given the 133-55 advantage Democrats have in the General Assembly and our re-electing a governor who won’t say no if the General Assembly passes a tax increase, it’s pretty much a fait accompli we will be stuck with at least one of these increases, if not more. That’s why elections matter, and the fact that many Free Staters are tapped out doesn’t matter to many of those who were elected last month.

It’s not the tone I would have preferred to end the year with, but things are what they are. Since this is almost certainly my swan song post for 2010 (unless something really major happens and I can somehow update from my phone) I hope you all have a happy and prosperous new year in 2011 – despite the best efforts of liberals everywhere.

O’Malley under pressure to drive jobs out of Maryland

I don’t need to be as shrill as the people at Progressive Regressive Maryland who want to drive more jobs out of the state by adopting combined reporting for business taxation purposes.

In the category of it’s always advantageous to see what your enemy is up to, I got this advisory from them last night regarding today’s meeting of the Maryland Business Tax Reform Commission:

Gov. O’Malley’s Under Pressure from Out-of-State Corporations to Save Their Loophole to Pay NO TAX…CALL HIM NOW…to “Save, Don’t Cave on Combined Reporting; Md. Needs the Hundreds of Millions!”  

Tuesday 2:00 pm, The Maryland Business Tax Reform Commission meets to decide the fate of combined reporting, a vital tax-fairness reform Progressive Maryland has fought for as a high priority for years.

Two weeks after Maryland voters re-elected Gov. Martin O’Malley, with significant help from progressive Maryland and allies, he is under great pressure from politically powerful corporations based out-of-state, who pay NO STATE INCOME TAX, to kill the one vital reform that would close the unfair loophole that lets them get off free.

Call…and leave a message – “Don’t cave to corporate lobbyists.” 

In the past, Governor O’Malley has been a vocal supporter of combined reporting, a reform that would help create a level playing field for Maryland businesses trying to compete with big multi-state corporations and bring in hundreds of millions in lost revenue for our schools, health care, and other vital services.

But right now, corporate lobbyists are trying to get Governor O’Malley to do their bidding and stop this reform…and we hear that it might be working. O’Malley’s appointees on the commission will decide whether to follow the lead of 23 other states and recommend combined reporting to our legislature, or to cave in to corporate pressure and let it die in committee.

Taken another way, we can follow the lead of 26 other states (most of which are probably employing a much higher percentage of residents in the private sector than Maryland is) and scrap the idea of combined reporting.

It’s also worthy of note that the Progressive Regressive Maryland says O’Malley favors this idea. Yet he’s politically savvy enough to figure out that it’s a loser if he pushes strongly for it himself, so he has his own version of a “blue-ribbon commission” to push the blame to if they recommend the tax code change (which they will) and it passes the Democratic-controlled Maryland General Assembly (which it probably will since the next election is a safe distance away.)

And it’s a funny thing about the projected “hundreds of millions” in revenues the group claims is waiting to happen if combined reporting comes to pass. Seems like every time the state counts on revenue magically appearing thanks to a tax increase, the number comes up short – imagine that! How much of that revenue will be spent on additional unemployment benefits to help the workers tossed out of work by increasing the tax burden on certain employers?

Nor is it pointed out by our liberal friends that businesses do not pay taxes – consumers do. They’ll pass along the increased costs to their customers, making our state that much less competitive at the retail level. All around, this isn’t a smart idea to embark on such a course in a time of recession (and pretty dumb during times of plenty as well.)

So go ahead and call (410) 974-3901 – apparently it’s a line into the Governor’s office. Tell him combined reporting is a bad idea and a killer of Maryland jobs. Remind him the unemployment rate has doubled on his watch, so just because he made sure his voter base turned out doesn’t mean we the people of Maryland support making the state even more business-unfriendly.

Will 2011 be another 2007?

With Martin O’Malley as governor, I’m afraid the answer is yes.

Brian Griffiths at Red Maryland questioned why the Maryland Business Tax Reform Commission, which was created as part of the 2007 Special Session, suddenly decided to begin meeting and taking public testimony in the wake of the election – where were they over the last several months, he asks.

In part this is thanks to a bill introduced last year which changed the original law and decreed the MBTRC has to complete its work by the end of this year, so the accelerated pace may be a natural outgrowth of that prospect.

But Griffiths naturally assumes that Martin O’Malley is going to use whatever they say as a pretense to club Maryland businesses with a tax increase. After all, if O’Malley wins he’s a lame duck who’s going to spend the latter half of his second term attempting to position himself as a contender for the 2016 Democratic presidential nomination, whether as successor to Barack Obama or challenger to a Republican president.

Of course, one selling point for him will be the shape Maryland is in when he leaves office and he’s extremely fortunate to have the job creation machine of the seat of federal government right next door. Is is any wonder the battleground of this election is MoCo and PG County? What happens to the the areas of Maryland outside the I-95 corridor will be barely noted and not long remembered by the MOM spin machine. We don’t need those icky chicken farms in our state anyway.

But as long as the federal government is hiring, it places businesses in a position where they have to grin and bear whatever tax increases are created just as long as they can access a relatively affluent market in MoCo and PG. It’s the rest of the state, particularly the areas close by state borders, where employers will be effectively told to pound sand.

Of course, there won’t be a need for a Special Session this time around because O’Malley won’t have the surplus he was handed in 2007 to cushion his first budget. They’ll get right to work in January attempting to chisel more revenue out of the state’s producers and redistribute it to the illegals and so-called working families. (That term only seems to apply if the worker toils in a union shop – all others need not apply.)

I’m not going to say that things will be easy if Bob Ehrlich wins – that is unless we have an unprecendented shift in the General Assembly which would see the GOP gain 34 House seats and 10 Senate seats to place themselves in the majority for the first time in, well, ever. But at least Maryland businesses would have a fighting chance.