Burden To Fall On Middle Class

Linowes Members Defend Tax Revisions

February 01, 1991|By Samuel Goldreich | Samuel Goldreich,Staff writer

Jeanette Wessel's question said it all.

"I'm curious if embalmingwill be taxed," the Anne Arundel Trade Council's executive vice president said. "Are you going to get us coming and going?"

For the record, no, embalming would not be taxed under the sweeping $807 million increase proposed for next year by the Linowes commission.

"Funerals are a sacred item," Jay Ladin, the commission's deputy director, told council members at a briefing in Parole yesterday.

But for more than 90 minutes, Ladin and commission member Donald E. Hood defended the proposal from the complaint that residents of Anne Arundel -- one of the state's five wealthiest counties -- could end up subsidizing their poorer neighbors.

Gov. William Donald Schaefer is touting the commission report as the way to finance transportation and education improvements statewide and to help Baltimore Cityand the state's 11 poorest counties.

The measure promotes cuttinglocal property taxes in exchange for the state returning its levy onreal property to local governments. Anne Arundel stands to gain almost $35.4 million in state aid if it lowers its $2.46 property tax rate 14 cents for fiscal 1992, which begins July 1.

But the commission has also recommended boosting the state sales tax from 5 cents to 5.5 cents on the dollar; imposing an annual 2 percent tax on the valueof cars and boats; raising $100 million through income tax increaseson the wealthiest third of state residents and increasing the corporate income tax from 7 percent to 7 percent.

These elements -- designed to relieve households earning less than $40,000 -- are under attack in Anne Arundel, where more than half the county's households have incomes in excess of $45,000.

When Gov. Schaefer appointed the 17-person commission three years ago, members assumed that they woulddevise a system to shift the burden to wealthier taxpayers, without raising the level of taxes overall, said Hood, one of three panelistsfrom the county.

But, while a "revenue-neutral system" would meetthe needs of impoverished residents of Baltimore city and other areas, he said it would also rob Anne Arundel and other wealthy counties where growth puts constant pressure on government services.

"As far as taking from the rich and giving to the poor, that's just a fallacious argument. It falls on the middle class because that's where themoney is," said Hood, a construction consultant. "If you're going tohelp the poorer subdivisions without taking from the richer ones, there's only one way to do it and that's to raise taxes."

He also noted that the commission had to cope with the change in state financessince 1987, which have shifted from a $400-million surplus to a $400-million deficit.

Ladin urged council members to consider the state's broader interests.

"This is really a blueprint for what happens over time," he said. "Will we have the infrastructure that businessneeds? Will we have the educated labor force that labor needs?"

But worried that the property tax on boats could further undermine thecounty's already struggling maritime industry, Wessel had one last question.

"How do you make a decision of this kind of structural change without knowing the economic impact?" she asked.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.