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October 19, 2011

Boost would put Maryland in top 10 states for gas tax

Gov. Martin O'Malley says he is open to a Maryland gas-tax increase of 15 cents, which would raise Maryland's gas tax from 23.5 cents per gallon to 38.5 cents per gallon. By one measure -- gauging only the excise tax, and assuming other states don't raise their gas taxes, too -- that would make Maryland's fuel tax highest in the country. See the Tax Foundation's table below.

However states such as California add a regular sales tax on top of the excise tax, and Maryland doesnt. The Tax Foundation also counts other gas-related fees to try to compare apples with apples. Even at 38.5 cents per gallon, Maryland's total gas tax would be less than California's 2011 total of 47.7 cents per gallon. But Maryland would still jump from 27th highest to 6th highest, based on total 2011 rates. Other states, however, will probably raise their own gas taxes in the next three years. Connecticut's governor, for example, tried to raise the gas tax this year and may try again.   

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Posted by Jay Hancock at 6:30 AM | | Comments (6)
Categories: Taxes
        

Comments

One party rule - that's the Sun Paper's nirvana. No political checks and balances = tax increases at will. Who's going to call them out? Who's going to stand in their way? Who will hold them accountable? The answer to all three is no one, so please go enjoyed the gerrymandered redistricting map, and watch O'Malley do for the state what he did for the city.

There would be no need to raise the gas tax is Md's Thief in the night (O'Malley) didn't steal the highway maintenance fund.

I guess the big question would be how much of a negative economic impact this would have upon the local economy. I know it's not as widespread an impact as a barrel of crude price increase, but at 15 cents, I'd expect some negative effect.

It's sad that Maryland's "progressive" news source fails to mention whom this will hurt: the poor. Why not note that this is a regressive tax? Is O'Malley really going to put the money into more buses in Baltimore or other "progressive" transportation solutions? I fear that this article leaves out more than it contributes to our understanding of the state's transportation dilemma.

I note that the chart shows that the gas tax in Pennsylvania is significantly higher than in Maryland, but, at least in the parts of the two states I drive through, the actual cost of gas at the pump is cheaper in the Pennsylvania. It makes one wonder if gas taxes really effect the price customers pay at the pump. Perhaps companies simply charge whatever will make them the most profits in a given region, and all the gas tax effects is how much absolute profit they make on that price, rather than the price itself.

If so, this may really be a tax on gas companies more than it is a tax on people- and I think the gas companies can afford to pay it.

Would love to see a study on the interrelationship between gas taxes and the price at the pump or lack thereof.

I'm interested in how this will get our state out of debt (budget neutral) or are we just taxing so we can spend more. Personally, I don't think it will do anything other than provide a legal way for the state to continue to steal from us.

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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 Tuesdays and Sundays.
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