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September 20, 2007

Readers say: No new taxes!

More excerpts from emails & the comments section of yesterday's column:

-- I read your column all the time and really like it, but I thought you gave O'Malley a free pass today. I understand that some taxes may have to increase to cover the budget deficit, but don't you think it would be a good idea for the Governor and General Assembly to look at cutting spending in conjunction with a tax increase? I just wanted you to know what one of your readers is thinking.

-- I wanted to point out a few problems with your editorial in with Mr. O'Malley's plan. Number 1 is that his plan is merely a short-term fix. To fund the $1.5 billion (or $2 billion they now exclaim) you can't rely on a one-time auctioning of slots licenses which is estimated to bring in between $400-600 million, but that is a big part of O'Malley's plan. Do the math:

Sales tax increase: ~$750 million (*note that this number was derived from projects made before the 2% loss in sales tax revenue from last year...should be more like $730 million)
Titling Fees: $170 million (going strictly to the transportation trust fund)
Corporate Taxes: At most we're talking $60million of which they want to split it between the general fund and transportation trust fund.
Service Sales Tax: They keep downplaying this as modest so fair assumption is $100 million.
Income Tax Increases: This is the big question mark
Slots: $400-800 million, but we know O'Malley won't go with Miller's plan so $600 million at best with a one time option.

Towards the General Fund then we have just shy of $1.5 billion assuming the one-time slots auction at $600 million. Now remember our goal is $2 billion and not $1.5 billion meaning we need to raise an additional $500 million from the income tax (hardly doable with the numbers they're discussing). To compound matters is discussion of a property tax cut of .03cents and an increase to the EIC. Property taxes net about $618 million (transfers which arent included in MOM plan, about another 185) so a 27% cut to the $618 million is $166 million less in the budget. Now you're down back to $1.3 billion. I assume MOM will not fund GCEI so that'll shave off $100 million bringing his plan with property tax cut to within $100 million of $1.5 billion and still shy of including EIC #s.

So you raise the cigarette tax... except doing so actually eventually turns a negative impact and they're counting it as a steady revenue stream.Do the math. It's a one-time fix that can't hold up. What's worse is that they're proposing new spending to go with these new measures?
I wholely disagreed with your assessment and find it sad that you're actually agreeing with MOM when YOU HAVEN'T EVEN SEEN HIS NUMBERS!

-- I just received the largest BGE bill in my life. The brain dead democratic general assembly screwed the taxpayers back in 1999 and when we start to pay for their idiocy, the boy mayor wants to increase taxes.

Oh yea, 83% of Marylanders will not be affected! A number brought to us by the guy who believes there was a 40% decrease in crime in Baltimore. The one, on his watch, where $50 million + from the city school system just disappeared. He must believe that all Marylanders "graduated" from Baltimore city schools to believe the 83% lie.

Oh well, the citizens of this state are getting what the wanted... Disgusting

-- I work hard. Every year I get a modest increase in my salary. And every year that extra money is sucked away from me and my family. It's just not fair! I'm tired of being the cash cow for the state. O'Malley - don't you DARE take any more money from my family. Cut services and social programs to get the money you claim you need, and for God's sake STOP adding more services and social programs. Not a single one benefits my family. BGE increase, gasoline prices, phony increased assessment of my home's value, sewer tax, ungodly increase in vehicle registration fees, and now all this that O'Malley proposes? This is robbery. Time for a violent backlash!!

Posted by Jay Hancock at 11:21 AM | | Comments (22)
        

Comments

We can all complain, moan and groan all we want about the significant tax increases proposed by the Governor and it will fall on deaf ears. THE RULING ELETE DO NOT CARE ABOUT US SERFS. Why work? Just go on the dole.

People are actually advocating FEWER social programs? Why, have our social ills been cured? Ridiculous.

If O'Malley doesn't increase taxes then the next governor will. Or the next. Or the next.
At some point the revenue has to increase & that comes from the pockets of the people.

Or would you folks prefer to drive on roads like Pennsylvania's? No salt when it snows up there, they just throw sand down which damages both cars & roads.

Bring on the slots, bring on the higher income taxes for the wealthy. And then show me a balanced budget or you're out of office.

If increased spending was the cure to our social ills, we would be living in utopia by now.

No doubt there are government programs that need more money. We need to spend more money on infrastructure; however, infrastructure is not a social program. Our societial ills can not be cured by government spending.

Car sales are down signicantly, there are about 150 to 200 percent more homes for sale than two years ago and all O'Mally and the Democrats want to increase taxes. Wait until house prices really slump and state and local property taxes go down 10 percent and then we'll see some really big state and local deficits. The legislature should wait until the next regular session for this and see how the economy looks.

Sand damages roads more than salt? Talk about ridiculous.


It is elitist for O'Malley to consider a household income of $150,000 as 'rich'. Does the Democrat party, the so-called champion of the little-guy, consider a husband and wife, who work as a policeman and a teacher, or as a computer programmer and a nurse, members of the rich, upper class? Disgraceful. The Democrats invented this budget problem by passing Thornton knowing full-well there was no funding source. Now they claim we all have to pitch in to help the State. How about this - STOP THE SPENDING.

I find it very disingenuous to take O'Malley to task for having to raise taxes. If Ehrlich would've won, he would have had to raise taxes as well (or maybe just more 'fees', hehe).

You may argue what got us into this fiscal mess, but something needs to be done to correct it, and 'trimming the fat' will not suffice.

The largely conservative initiative blaming the '99 assembly for the current BGE problems rings a bit hollow to me, considering they went with what is now conservative dogma: they decided to let the market sort things out. Oops!

Maryland's problems transcend political party. Instead of attacking new and/or existing ideas, how about offering more of them?

It amazes me the way OMalley and his staff can spin the words "tax increase".. it is now a tax reform, or tax restructure.so only the rich/wealthy will pay, elimate some property tax... 83% will not pay taxes...need for a special session ($50,000 a day for the scumball legistators)... Lies.. and B.S. They don't care its spend,spend,spend the taxpayers money....

I'm surprised that there were not more negative comments. No one likes tax increases but everyone wants the services that effect them. Costs increase..the cost of living effects government as well as individuals.

Having said that, I do believe government at all levels should be more prudent in their spending. I see no difference in the political parties in this regard.

Count me on the side of "slots" and modest tax increases.

I would gladly pay a few more dollars to see better roads, less crime, and improvements to Marylanders' overall well-being. If you're single and making over $150,000, you can handle the extra tax. After all, most of the wealthy earn their money off the backs of the poor one way or another. So if the majority of Marylanders, including all our Soldiers and their families, are better off because the rich have to pay their fair share, then I'm all for it.

Enough with the spin, enough with the increase in taxes including the tobacco tax, and stop insulting the intelligence of the majority of people who live in Maryland.

Cut spending, cut waste and redundancy, force entities on subsidies to fund their own programs with incentives for success. Implement commercial best practices; hire commercially successful financial types to bring the budget back under control. No corporation in the world would survive it if were run the way this State is run.

Wasn't one of O'Malley's main campaign slogans for his run as governor was to "Strengthen the middle class families?"

Well guess what folks, raising taxes is only going to weaken them.
Governor Martin J. O'Malley is a pathological liar and a demeaning fraud.

RECALL!

I think increasing income taxes on the wealthiest makes sense, those who can afford to shoulder the burden should instead of those who cannot.

I disagree with the sales tax increase as sales tax is the most regressive form of taxation

When will the crybabies that always say "Don't raise my taxes" learn that they benefit from higher taxes. It's a "get what you pay for" economy. If you don't want better schools, better highways, better social programs, better police and fire fighters, move to another state. We won't miss you. I say "good work MOM", someone finally had the guts to do what had to be done. MOM should have raised the liquor taxes and gasoline taxes also. Take a look at the roads and tell me we don't need more money for repairs and maintenance. Remember what your taxes pay for the next time you have to call an ambulance for someone in your family or the next time a snowplow comes down your street after a snowstorm. Crybabies GET LOST!

I would like to ask all the people who say to cut social programs, Do you have a severely handicapped child or adult that you cannot take care of and are dependent on social programs for their survival? Well...I do. My son is severely handicapped and without social programs for his housing, meals, and work, he would die. So, ask yourself what would happen to you if one of your loved ones suddenly needed those social programs that you advocate in cutting? Those who advocate cutting social programs never have walked a mile in my shoes. You want to cut something? Cut the damn money we are wasting in Iraq and we wouldn't have to raise taxes. Nearly $1 trillion spent in Iraq for what? We will be paying higher taxes for the next generation due to the money wasted there.

I live in Atlanta and just read somewhere that MD. is the wealthiest state in the country & that you are also one the most TAXED states in America. Why would you need a tax increase?! Also, I visited Baltimore this past August and that city has THE WORST streets of any city I have ever traveled. Does your city ever re-pave the streets of your city?

Jay ,

I my opinion the tax cut is largely cosmetic. For the huge majority of people it is no more or no less than $90. This is because the old rate 4.75% kicks in at $22,500. But what really bothers me is why such a huge marriage penalty? Two earners who are married get hit as soon as they each earn $100,000. That's nice but it sure isn't wealthy in Maryland. If they divorce they each get a free ride up to $185,000 and each get their $90 cut. This is a big increase on the married upper middle class families and a token decrease of around $3.50 in a bi-weekly paycheck to the "95%". It seems to me that "progressive" would have given the lower middle class a better break. $90 won't cover their sales tax hit and god forbid they smoke.

Just last week the headlines were that Maryland has the highest income in the country - so it would follow that tax receipts are going up too.

No where does the Sun or anyone else seem to publish how much spending goes up year to year - there should be much more visibility to where the money is going - any normal company doing budgeting shows a 3 year + trend but all we get is the spin to streghen and reform - what bunk

Why don't we repeal Thornton - most schools seem to be doing well except Baltimore City!

The Sun has had a double standard of desiring a 2 party federal rule (democrat legislature and rep. president) but advocated from day 1 for a "benevolent dictatorship" at the state level

Dont blame me I voted for Ehrlich!!!

I moved from Maryland to Northern Virginia last year partially to get away from Maryland's high taxes and crime. With these new taxes and probably no decrease in crime, there is no way I'm moving back anytime soon.

Waaah, waaah, waaah. Everyone wants services; no one wants to pay for them.

For those that say "tax the rich", please remember that the rich CAN move to another state. When the party becomes too expensive, they'll leave and then you'll be stuck with the bill. If you think there is no waste that can be cut, you are either a fool or an O'Malley supporter whose income taxes will not be raised. Even the rich can afford to pay only so much. I say we cut out the money sent to CASA of Maryland first.

For those that say "tax the rich", please remember that the rich CAN move to another state. When the party becomes too expensive, they'll leave and then you'll be stuck with the bill. If you think there is no waste that can be cut, you are either a fool or an O'Malley supporter whose income taxes will not be raised. Even the rich can afford to pay only so much. I say we cut out the money sent to CASA of Maryland first.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.
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