The “One Maryland” imagery Gov. Martin O?Malley repeatedly invokes in speeches to lobby for economic equality is here. We?re all becoming one poor Maryland thanks to a slate of higher taxes passed in the special session just as the housing market started to crumble and food and gas prices began to skyrocket. We?ll be even poorer if members of the General Assembly do not repeal the sales tax for computer services scheduled to start July 1. They can begin the process today at committee hearings debating a series of bills to repeal it or scale it back.
Shame alone should prompt legislators to remove the onerous 6 percent tax. Democrats did not even give the 6,000 businesses that employ 62,000 workers in the state a chance to share their opinion about it before imposing it on them.
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Economics also dictate legislators unshackle the industry. As numerous computer service business owners have outlined in these pages and articulated to legislators, they plan to scale back operations in Maryland, move to another state or search for a headquarters elsewhere. These plans mean the $214 million in taxes anticipated from the law may not be realized. More importantly, as Comptroller Peter Franchot said, it sends a “disturbing message” to the state?s business community just as Maryland is starting to emerge as a global technology center.
Maryland cannot afford to cannibalize one of its most vibrant business sectors ? especially with state revenue predictions downgraded last week by $333 million over the next 18 months.
According to data from the Maryland Department of Business and Economic Development, information workers, which include computer services employees, earn the second highest wages in the state. They are also an integral reason Maryland has the highest percentage of professional and technical workers as a percentage of its work force in the United States. So losing computer services workers means losing a big reason why high-tech and high-wage companies would choose to locate, open or expand here.
We may bask in the glow of federal largesse, but that money has not immunized the state against the housing downturn or subprime mortgage mess. And it will not keep computer services businesses here.
For the sake of one richer Maryland for all, legislators must repeal the tax and cut an equal amount of spending from the budget. We would be happy to send legislators our list of suggested cuts along with those outlined by the Maryland Chamber of Commerce.
