Wait, so instead of a furlough, Del. Steve Schuh gets to take a tax deduction?

Tough decision for a guy with an MBA from Harvard who lives on Gibson Island and whose website describes him as a "former managing director of two multi-national financial services firms."

Making a tax donation doesn't save us any money. What a guy. Forego the salary like every other state worker and then we'll have a party for you.

Del. Schuh hasn't lived up to his business and academic credentials.

Last year he brandished an analysis of the 2007 special session tax increases claimin a family earning $64,000 will pay extra $351 under the plan.

Del. Schuh said his methodology was reviewed and approved by the Maryland Department of Legislative Services and economist John Lott, but he admitted to me in an email that both had done so by phone and he did not provide the name of the person from the DLS with whom he spoke.

His methodology was seriously flawed and overstated the impact of the tax increases on the hypothetical family in question.

He simply took the first year yields DLS estimated for the computer services tax ($214 million), corporate income tax increase ($112 million), closing the loophole on corporate property transfers ($14.1 million), and cigarette tax ($164 million) and divided them by the number of Maryland households (2.1 million).

So he assumed a family earning $64,000 will pay the same share of these taxes, either directly or indirectly, as a family earning $120,000, or $500,0000, or $5 million. Each of these families, he assumed, would pay the same fraction of the total estimated yield for those taxes.

Nonsense!

Economists recognize that most taxes on businesses will be passed on to consumers, so I won’t dispute his assumption that ALL the increased taxes on businesses are being passed on to consumers, and that all the consumers are in-state consumers.

You don’t need an advanced economics degree to question his assumption that a household earning $64,000 share an equal fraction of these new tax burdens with all other households in the state, regardless of income and therefore spending, not to mention smoking habits.

In fact, he himself acknowledged the disparity in spending based on income when he estimated that the hypothetical family earning $64,000 spends 22% of its income on taxable goods “per DLS fiscal policy note for House Bill 2.”

If he recognizes that a household earning $64,000 pays much less sales tax this year than a household earning $250,000, why does he assume both of these households pay the same amount in pass-through of tax increases on businesses, or otherwise share equally in the impact of the business tax increases?

Then there’s smoking. A smoke-free household isn't coughing up directly the $78 in increased cigarette taxes Del. Schuh assumed each of Maryland’s 2.1 million households is pay.

I'm sure the average chain smoker buying instate cigarettes is coughing up more than $78 this year in cigarette taxes, but such poor souls have no hope of recovering that expense by passing their out of pocket costs onto the general public.

Thus far, Del. Schuh's legislative work falls short of his credentials.