Maryland sales tax: Low compared with other states
The centerpiece of former Gov. Robert L. Ehrlich's economic platform is his attempt to regain the governorship is cutting Maryland's sale tax from 6 percent to 5 percent. Gov. Martin O'Malley, you'll recall, raised it from 5 percent to 6 percent. But a study by the Tax Foundation shows that, when ranked nationally, and when local sales taxes are taken into account, Maryland's sales tax doesn't look all that high.
In "low-tax" Tennessee, for example, the weighted average local sales tax brings the statewide rate up past 9 percent -- highest in the country. By this measure Texas, New York, Arkansas, Arizona and many other states -- a total of 32 -- all have higher sales taxes than Maryland. To repeat, the Tax Foundation didn't cherry-pick the highest local rates from each state. It produced an average rate for a whole state, weighted according to how much retail activity took place in a locality.
Here's Sunday's column on why Ehrlich should favor cutting Maryland's income tax instead.







Comments
Yes, but several of the states that you mentioned do not have state income tax. So their sales tax accounts for a larger portion of their tax burden. You can compare Maryland and Texas all you want. The bottom line is that we pay a whole lot more in total taxes.
Posted by: Dan | August 20, 2010 9:32 AM
Correct Mr. Hancock. However, Maryland is the fourth highest in the nation in terms of a state and local tax burden. This figure also taken from the Tax Foundation. Whatsay you on that? Is it your goal to point toward Maryland's so-called low tax burden? Let's be honest. Ehrlich's point is that he reduced the deficit by not raising the sales tax. It wasn't necessary. Fast forward to the fiscal budget for 2011, it outlines some major tax increases yet by the current Governor. Frankly, I'd rather vote for Ehrlich who will do his best not to simply spend and tax which is O'Malley's solution. Oh that and furloughs.
Posted by: Jessica Fugate | August 20, 2010 9:33 AM
Darn,
I just got home and read your blog, all ready to respond but the morning shift comments already shot your Pro Martin in the tank try as you might stance to somehow make people think Marylanders pay less taxes that Texans.
You have totally lost your mind as we move closer to this election.
Congrats, at least the progressive lib base who reads this stupidity with believe it.
Posted by: Dennis | August 20, 2010 5:21 PM
The likes of Texas are always going to be a poor comparison to Maryland because Texas has a large industry (oil/gas) that can be taxed in lieu of residents (and then pass on the cost to other states). Another state that has no income tax, Florida, has the advantage of an uninterruptible supply of tourists. Maryland cannot replicate either.
Comparisons to Virginia are much closer to apples-to-apples. We still have higher taxes. But we also have a more thoroughly urbanized state. Apart from what extra government programs some Marylanders may want, there is a higher cost to maintaining suburbia than the extensive portions of the middle of nowhere that are found in Virginia.
If Maryland were such a horrible state for accumulating wealth, one would think that far fewer of the very wealthy would want to live here. But many do. My guess would be that some of them don't like NoVA traffic.
Posted by: Joseph | August 20, 2010 5:49 PM
There's a lot of nonsense flying here.
The Tax Foundation ranks Maryland as #4 in terms of state/local tax rate, but Maryland is also the #1 state in terms of income, and given that income taxes are progressive, we would expect states with higher incomes to pay a higher percentage of income as taxes, so this isn't a good indicator of high tax _rates_.
A better indicator of that would be to select an income, and then compare the taxes a person of that income would be expected to pay in each state.
The other big lie here is the idea that we can compare economic conditions today, during a recession with the accompanying impact on tax revenues, to economic conditions of a few years prior.
When somebody promises to lower your taxes, thank them, but then ask them how they're going to do that, and in what areas they're going to cut spending. Because in this election year we're a whole lot of "cut taxes" and "lower deficits" without a whole lot of explanation about how that's going to be accomplished.
Posted by: harry | August 20, 2010 5:51 PM
Have you lost your mind Mr Hancock? You are another one of the politburo fools at the Sun that looks at one narrow aspect of the tax issue rather than the sum total. Maryland is currently the first or fourth overall state for highest cost tax structure in the country.
Give me a break. This is garbage journalism.
Posted by: Sean | August 20, 2010 6:27 PM
Given that a large proportion of state and local taxes go to education and that Maryland has one of the strongest public school systems in the country, I'd say we are getting good value for our tax dollars. We can always find ways to become more efficient but I wouldn't mind paying more taxes if it means that those dollars will go towards educating our children.
Proud Product of Maryland Public School System
Posted by: Anand | August 20, 2010 6:43 PM
Jay- if you are middle class, live and own a home in Baltimore City, the City your paper is based in, the total tax burden is much higher than the States you mention in your piece. Those States also tend to be less expensive across the board.
In the last few years Baltimore City residents have had both their income taxes and sales taxes increased... along with other fees.
Posted by: Dunn | August 21, 2010 9:09 AM
I think that with taxes you largely get what you pay for. PA has lower taxes on net than we do but have you driven on their lousy roads? Texas has low taxes but a relatively weak state government with poor social services and a lousy wingnut-bowdlerized education system overall. When you pay more taxes you generally get better roads, better schools and better public services overall.
What makes Baltimore bad is not the taxes but the poor ratio between taxes and services specifically in Baltimore. The police cannot seem to keep qualified personnel. The prosecutor's office is often farcical in its failures. If taxes alone damaged economic opportunity, 3 milliion highly-taxed Brooklynites would have moved to Biloxi already. It's dysfunctional Baltimore government, not its price tag, that kills.
Posted by: Bruce Godfrey | August 21, 2010 5:07 PM
I moved to NH six years ago with a mattress I had to put on the floor and $100 in my pocket. Today I own a restaurant with gross revenues of $2.3 million. NH's pro-business, low-taxes, Live-Free-Or-Die culture is a big part of what made that possible. It would never have happened in my native Baltimore.
I haven't paid a dime in state or local income or sales taxes since I moved here, and I would never go back. High tax states are collectivist pyramid schemes, and I want none of it.
Posted by: Keith Murphy | August 21, 2010 11:40 PM
All of you who are trashing Jay Hancock for looking at just the sale tax rate, did you actually read his entry. He's discussing sale taxes because Ehrlich has specifically discussed cutting sales tax back to 5%! Did read the last sentence in his blog promoting his column in tomorrow's paper discussing why Ehrlich should concentrate on income tax instead? My 9th grade English teacher at Poly would have given you failing marks for reading comprehension!
Posted by: cabterp | August 22, 2010 1:56 AM
we've got to stop looking at these types of issues in isolation. Costs for just about everything is rising and our standard of living is dropping. Our education system is failing us; we're now 12th in the world in terms of graduation rates. Government in its current form no longer serves us well. It's corrupted by money and our representatives are concerned only with self preservation - for the most part. The system needs to change, significantly. Obama promised CHANGE and has not delivered because he can't. I will not give the government another dollar without having an issue with it. Stand up Marylanders and be heard! Join the movement to change America for the better!!!!
Posted by: mike | August 22, 2010 12:35 PM
@cabterp: Thank you. Reading comment after comment I was waiting for someone to actually recognize Jay is addressing sales tax in a direct response to Ehrlich's own statement. He concludes by floating the idea of cutting the income tax.
Everyone slamming Jay here owes him an apology for not bothering to read what he's actually writing.
Posted by: MobtownMatt | August 22, 2010 4:33 PM
Why is Maryland SSR such a highly taxed state?
Democrats are buying votes in areas with high crime, high welfare rates, poor performing yet expensive school districts-PG County and Baltimore.
Robbing Peter to buy Paul's vote.
Posted by: Cato | August 22, 2010 7:03 PM
Because someone murders someone why can't you? Right?
This has to be a joke Jay Hancock? Maryland has to focus on the problem with spending and not just increasing taxes as O'Malley always does.
I can tell you right now if we cut the income tax back to 5% it would be HUGE for my family. Being a lower income family this tax increase cost us a lot. THANKS O'MALLEY!!!
Posted by: Jake | August 22, 2010 9:10 PM
To Jake:
If you made $100,000. and spent every penny so that it was subject to MD sales tax, you would be spending only $1000.00 more than before the sales tax increase. Since I know that's not the case, you really just want something to whine about. A more realistic case would be someone who earns about $30,000. per year and about 1/3 of that (or less) would be spending subject to MD sales tax, which would mean an annual total of $100.00 more paid per year than before the sales tax increase. Even I, a homeless person, don't have a problem paying that so that people more desperate than I can get government help. (And no, I am NOT referring to houseowners whose sense of entitlement is truly shocking.)
Posted by: Erin | August 23, 2010 10:30 AM
This study by the tax foundation seems highly flawed, as a Pennsylvainia resident, I pay no sales tax on clothing under $100 or groceries but pa is listed as having a higher sales tax than Maryland I guess thats true if your buying BMW's, but for the average resident of both states I would suspect Pa is less burden than Md.
Posted by: Dudley Obrecht | August 23, 2010 11:01 AM