A group of Maryland retailers has launched a public campaign against a state sales-tax increase under consideration by the Maryland General Assembly.
Morethan 25 Maryland furniture stores urged Marylanders to “say no” to the sales-tax increase in an advertisement on the back page of The Examiner Monday. The retailers include Baltimore?s Gavigan?s Furniture, Lauman?s Fine Furniture and Shofer?s Furniture.
The state, facing a $1.5 billion deficit, is considering passing a bill that would push the state sales tax from 5 to 6 percent ? a 20 percent increase. The tax increase could raise an extra $750 million for the state.
Local retailers, however, argue that Maryland businesses will lose customers to out-of-state retailers that have lower or no sales taxes. Delaware, for example, does not have a sales tax.
“We compete vigorously against out-of-state firms,” said Ray Kenney, owner of the 57-year-old family owned Pasadena Furniture, another ad sponsor. “We?re pleading for our survival.”
Maryland should examine its spending and consider the potential revenue from slot machines, said Richard Clinch, director of economic development at the University of Baltimore.
“The problem with the sales tax is it?s regressive,” Clinch said. “The justification for a sales tax is Maryland has a relatively high personal income tax burden.”
Maryland?s personal income tax burden ranks 35th in the county, while its sales tax collections per capita ranks 42nd in the country, according to fiscal year 2004 statistics from the U.S. Department of Commerce.
“Retailers hate tax increases ? if you tax it, people spend less on it,” Clinch said.
In July, Gov. Martin O?Malley announced more than $280 million in fiscal 2008 budget reductions and containment measures. The reductions served as an initial step to closing the state deficit.
“In the coming months, we face more difficult choices as we work with the General Assembly to balance the budget and continue to make critical investments in our State?s future,” O?Malley said at the time.
Staff writer Len Lazarick contributed to this article.
