Tax Reform for Maryland

November 18, 1990

Before naysayers dismiss the recommendations of the Linowes commission to revise Maryland's outmoded tax structure as just another gimmick to hike everyone's taxes, they should take a close look at the group's suggestions. Yes, they are bold. Yes, they are controversial. But above all, they are sensible and compelling.

This commission, composed of some of the state's best -- and most impartial -- minds, discovered some unpleasant truths about Maryland's tax system. It is unfair. It favors the rich and penalizes the middle class. It does not support educational excellence or meet transportation needs. It has not kept up with structural changes in the economy. And it does not give counties ways to lower the property tax.

As Montgomery County lawyer R. Robert Linowes, who chaired this commission, notes on the page opposite, this unfairness and inequity led to the voter rebellion that swept through Maryland on Nov. 6. Voters sense, said Mr. Linowes, "that the system for raising and distributing state money is neither fair, nor in step with the times."

The Linowes panel does not recommend revolutionary tax changes. Instead, it wants to broaden the sales tax, slightly increase sales and income taxes, place a greater tax burden on the rich and both simplify and lower local property taxes.

Taken as a whole, these suggestions would mean lower taxes for a family with an adjusted gross income below $50,000. The ones who would feel the biggest tax bite would be those earning over $200,000 a year. That's the way it should be.

But the Linowes commission took another notable step: it identified three areas where the state is falling far short of its objectives. The panel recommends that a slight rise in the state's income tax -- which actually lowers taxes for 1.4 million Marylanders -- be earmarked to assist Maryland's 12 poorest counties. It wants a broadened sales tax directed to local education for every county. It urged that a new 2 percent tax on vehicles be used to upgrade roads and mass transit.

The net effect would be a flexible and progressive tax structure that addresses this state's most critical needs. It would help citizens in all subdivisions. Yes, Baltimore City would be a big beneficiary ($150 million), but so would Montgomery County ($33 million more for transportation, $10 million more for schools and a 12-cent cut in its property tax rate). It is a plan that makes sense.

Gov. William Donald Schaefer and legislative leaders must give the commission's report careful study and then decide how to proceed. It could prove impossible to act during the regular 90-day General Assembly session starting in January. A special session later in the year might be best. But this report is a landmark document that elected leaders should not simply put on a shelf. It addresses crucial concerns that cannot be ignored.

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