Maryland's income tax must be reducedThe Maryland Chamber...

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February 17, 1996

Maryland's income tax must be reduced

The Maryland Chamber of Commerce has proposed a 15 percent reduction in the personal income tax rate over three years as part of its strategic plan to increase economic growth and improve Maryland's competitiveness in creating, retaining and attracting jobs.

Recent opinion pieces (Jan. 24 from Kalman Hettleman and Barry Rascovar's Jan. 28 column) criticize the chamber's proposal based on their apparent belief that a tax cut will not stimulate economic growth and that Maryland's combined 8 percent personal income tax rate is not too high.

What both commentaries fail to explain is what Maryland has to gain by remaining in the top tier of states with the heaviest personal income tax burden.

Maryland has great assets in our location, our transportation network, our generally well-educated work force, our wonderful quality of life and our fine universities and colleges that can be leveraged to produce greater job growth and opportunity for our citizens.

However, Maryland's post-recession economy continues to lag behind that of the nation's despite key successes in the industries of information and biotechnology, health care and warehouse distribution facilities.

Maryland must respond to the reduction of federal government employment by creating higher levels of private sector jobs. That requires changing the factors that undermine our great assets.

By any measure, Maryland has one of the nation's highest personal income tax burdens.

The legislature's own Department of Fiscal Services reports that Marylanders pay the 4th highest level of personal income taxes in the U.S. and the highest level in the mid-Atlantic (excluding the District of Columbia).

Our total tax burden per capita is the 12th highest nationally and the third highest in the mid-Atlantic.

Maryland residents know this is undesirable. The recent survey by the University of Baltimore's Schaefer Center for Public Policy demonstrated that 55 percent of Marylanders believe that taxes are too high and 79 percent would favor a tax cut if it would attract business and spur economic growth.

The Maryland Chamber of Commerce is spearheading an aggressive public policy agenda to build a competitive climate in which to attract and retain jobs. In addition to tax cuts, the 1996 agenda strongly advocates regulatory reform, the commercialization of academic research, tax credits for job creation and sales tax exemptions for manufacturers.

Business and Economic Development Secretary James Brady and the private sector advisory commission charged with enhancing Maryland's economic growth concur with this strategy.

Those who criticize our efforts must understand that defending the status quo does nothing to create well-paying, family-supporting jobs and hurts Marylanders of all income levels. Maryland's critical opportunities for improvement are universally regarded as our regulatory environment and personal income tax rate.

Because business location decisions are less a process of site-selection than they are of site elimination, any factor that is out of line with competing states becomes a ''red flag.'' A ''red flag'' such as Maryland's personal income tax rate is sufficient to eliminate Maryland from being further considered.

We're out of the game well before the company typically begins interacting or negotiating with state and local economic development officials.

We must eliminate the ''red flags'' in 1996 for Maryland to send the message that we are pro-business and will treat large and small businesses favorably. Business activity will not stop and wait while Maryland legislators debate public funding priorities.

Bold action is required during this session of the General Assembly to send the message that Maryland can compete for jobs.

Why Mr. Hettleman and Mr. Rascovar object to producing jobs and allowing hard-working families to keep more of their earned income is a mystery.

The Maryland Chamber of Commerce will continue its drumbeat to help Maryland compete.

Champe C. McCulloch

Annapolis

The writer is president of the Maryland Chamber of Commerce.

A tax district for Roland Park?

In its examination of special tax districts, The Sun periodically reports that Roland Park is actively considering becoming one of the next districts (editorial, Dec. 22).

At its January meeting the Roland Park Civic League discussed these claims. None of the community leaders or residents knew of any movement within the community for such a designation.

As is the case each time The Sun reports this ''fact,'' we are left with the impression that either the writer did not adequately research the issue, or there is a plan being advanced from outside our community. For the record, the Civic League has now formally considered sponsoring a tax district and has unanimously voted against the concept.

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