Six state senators, all Democrats, have introduced an alternative budget package consisting of $827 million in tax increases, what they call the “Maryland First” plan. They claim their plan will help “keep Maryland moving forward.” However, it’s a recipe for more pain for Maryland’s working families.
The individual bills include a 12 cents increase in the gasoline tax, a 10 cents, increase in the alcohol tax, a dollar increase in the cigarette tax, reinstatement of the millionaire’s tax and combined reporting for multistate corporations.
Senator Paul Pinsky from Prince George’s County said “the plan is intended to expand the conversation about balancing the budget and to reduce the pain in the budget cuts.” Right, senator, because the $1.4 billion 2007 special session tax increase—the largest in Maryland history—finally brought the state’s finances into structural balance.
Another cosponsor, Pinsky’s county colleague Jim Rosapepe, told the Associated Press that the impetus for the tax package came from a meeting earlier this month with Governor Martin O’Malley, who told Democratic state senators he would keep an open mind about new taxes proposed by the legislature.
For O’Malley, keeping an “open mind” is a euphemism for weaseling out of his promise not to raise taxes. O’Malley even failed to make good on his promise to propose a budget without a tax increase. The newly minted darling of the national Democratic Party is simply letting the General Assembly do his dirty work for him, in order to hoodwink the rest of the nation that he isn’t a prolific tax hiker.
These senators should be forced to bear the burden of the gas tax themselves, as they are responsible, with O’Malley, for raiding hundreds of millions of dollars from the transportation trust fund. Had these politicians shown some fiscal discipline in the past, Maryland would be paying for transportation projects with cash instead of bond debt.
We should have no faith that increasing the alcohol tax will achieve the results it’s proponents claim. In 2007, the very same people touted similar claims for a tobacco tax increase, yet revenue from the tax fell $17 million short of projections. These taxes also disproportionately hurt the poor. Reducing smoking and alcohol consumption are merely vapid justifications used by people like Maryland Health Care for All honcho, Vinny DeMarco for increasing these taxes. Their real goal is expanding government run healthcare, which is why they come back time and again for increased sin taxes. In reality, people like DeMarco end up helping Phillip Morris solidify their monopolies.
Maryland’s ever-mobile millionaires speak volumes about the efficacy of such a tax. Furthermore, it’s not just millionaire’s Maryland’s high taxes are driving out of the state. According to IRS data compiled by the Tax Foundation over 67, 431 people fled Maryland for bordering, lower tax states.
O’Malley initially floated combined reporting in his raft of special session tax increases in 2007. However he jettisoned the plan, and for good reason. A Ernst and & Young analysis of O’Malley’s initial tax plan revealed this about combined reporting:
The static income tax increase would decrease Maryland employment by -587 jobs in 2012; job losses will increase to -641 by 2017.
The tax option would decrease personal income by $37 million in 2012 and $50 million in 2017.
Fellow “Maryland First” supporter, Senator Jaime Raskin (D-Montgomery County), said the plan would continue “investment in the social infrastructure.” That pabulum may fly with his amen corner of progressives, but what these taxes will do is further tear the fabric of Maryland’s middle class.
