Tomorrow's editorials: Delaware tax increases and a second stimulus
Here are previews of editorials we're working on. Let us know what you think. The best comments will run alongside the editorials in the print edition.
--Looks like Marylanders threatening to leave the state over tax increases have one less place to go. Delaware, long the darling of anti-tax types in the Free State, just wrapped up work on closing an $800 million hole in its budget – no mean feat considering the whole thing is about $3.3 billion. Gov. Jack Markell pushed for steep budget cuts but also about $200 million a year in tax increases. He increased the state’s value added tax to 8 percent and the income tax on top earners to 6.95 percent. (And when Delaware says “top earners,” it means anybody making over $60,000 a year.) Taxes on cigarettes, alcohol and slot machine proceeds are going up, too. The state is increasing corporate franchise taxes and the public utility tax and is resurrecting the estate tax.
OK, no to Delaware, then. How about Pennsylvania? The governor and legislature are at an impasse over closing that state’s budget gap, but Gov. Ed Rendell is pushing for an increase in the income and cigarette taxes, plus new taxes on smokeless tobacco and natural gas extraction.
Marylanders may still be smarting over the tax increases Gov. Martin O’Malley and the Democrat-controlled legislature approved in 2007, but they can take some comfort in the fact that as the state grapples with new fiscal problems, more tax increases are politically off the table. Maryland may have raised taxes earlier than its neighbors, but in the end, it won’t be alone.
--With the economy still lagging and unemployment growing, talk in Washington has turned to the idea of a second stimulus program. This is hogwash. Most of the money from the first stimulus hasn’t even gotten out the door yet, in some cases by design and in others by typical delays in implementing such a vast program. The nation needs to give the first stimulus time to work before borrowing more money to fund a second round.
Comments
Andy, What's the word on next year's budget? I know it's early but I heard rumors that it's going to a total FUBAR. I think the "Draconian Cuts" are actually going to come to fruition.
[I don't know anything yet, but it's hard to imagine otherwise. //AAG]
Posted by: Jeff | July 9, 2009 1:02 PM
Sounds like you are covering for your boy OMalley again Andy. You failed to mention that Delaware still has no sales tax. ZERO sales tax. Why no mention of that? As for budget cuts here:
Consolidate OMalleys, Brown, and Mrs. OMalley staff into one.
Is there really a reason each individual needs a staff?
What does a Lt. Governor do anyway?
Anybody in government making 6 figures or more should tale a 4 percent pay cut. Let the chiefs feel the pain instead of the Indians. Eliminate one paid vacation day per employee. 10 percent staff cut in Annapolis. Any legislator within 60 minute drive of Annapolis should lose their hotel privileges.Let them drive like the rest of us. Finally revamp the pension payment plan downward. Our legislators get far too big of a pension for a part time job. Their job is to serve the people, not to enrich themselves.
Posted by: jay | July 9, 2009 1:37 PM
What is wrong with Washington? Keep throwing money at the economy and it will wake up seems to be the maxim of the federal government. It is not working because all the jobs Barack Obama promised in the shiny new green economy are not here as yet and our decrepit old economy has been hemorrhaging jobs like crazy. When people don't have jobs they will only buy essentials and goods won't move out of the stores as fast as they did during our profligate days. The second stimulus is slated for whom? Where will the money come from except from the printing press? Hogwash indeed! You hit the right note this time!
Posted by: Anonymous | July 9, 2009 5:15 PM
why aren't people willing to pay some higher taxes for universal healthcare, i still don't understand it....we as americans pay a paltry amount in taxes compared to other countries which continually rank higher in the un human development list. why not pay a little bit more in taxes for better services for all? the economy can be helped by giving universal healthcare to all, businesses could higher more workers, and those workers could contribute with paying their taxes and we wouldn't have these insane budget deficets. We will always have to pay taxes, why not use those taxes in a better way?
Posted by: chris snyder | July 9, 2009 9:15 PM
Your feeble attempt to cover for your inept governor is transparent. There is no sales tax in Delaware and retirees pay no state income tax on Social Security benefits and/or the first $12,000 of other retirement income from any source. Half the folks I see in Sussex County retired here from Maryland.
Posted by: Tommy | July 10, 2009 6:49 AM
Andy,
No mention in the difference of the estate tax between MD and DE?
Oh and let's not gloss over the top earners dig . O'Malley's tax increase of 2006 (just as the recession was gaining steam, brilliant!) was one of the most REGRESSIVE packages ever put together.
Posted by: Waiting for the Sun to Set | July 10, 2009 8:25 AM
Chris most of those nations you mention have tax levels much higher than the US. The UK in addition to higher income rates has a 17.5% Valued Added Tax charged on vitually everything you buy. Most nations in Europe have similar taxes. You talking about quite a bit more than small increase in taxes. The CBO puts the cost of the current plans being discussed in the trillions. Talk to the average citizen in Europe and Canada about the waiting lists for certain types of services. How exactly would making coverage universal make the quality better for all or for that matter increase employement? More than likely business would have to foot some of the additional tax burdern as well? What you said is a nice dream, but does not work in practice. I'm not against reform, but it needs to be well thought out and not rushed through as it is currently being done.
Posted by: ravensfan | July 10, 2009 11:38 AM
If government collected taxes on a flat per capita basis then it could, "for the general welfare", provide for its citizens that which they could not provide individually for themselves ie a national road system, a national defense, a judicial system. If everyone paid equally for these services then everyone would be equally invested in how much was being spent and whether it was being spent wisely. Elected officials would at each election cycle would be held accountable. But when we pay disproportionally, with some 40% paying no income tax at all and the majority of taxpayers carrying only a fraction of the tax bill only the relative handful of high tax payers are outraged at the expansion of government. Add to that the phenomenon of taxes not longer used for " the general welfare" but for a net transfer from one person to another and politicians simply act a street thugs robbbing from the few who have to buy the votes of the many who want. Health care for all paid for by the few is yet the most recent outrage in the direct tranfer agenda.
Posted by: susan | July 16, 2009 1:07 PM