To lower its taxes, state must lower cost

June 26, 1996|By Richard E. Hug

YOUR EDITORIAL of June 3, ''One way to cut state's income tax,'' which called for the broadening of the sales tax, is flawed.

While such might result in a revenue-neutral plan, as you suggest, it would place us at yet another competitive disadvantage with our neighboring states.

Delaware, of course, has no sales tax and has a personal income tax burden of $759 per capita versus $873 for Maryland.

Compared to our foremost competitor, Virginia, our sales tax burden on a per capita basis is $321 versus $324, so any sales tax increase or broadening would give Virginia something else to crow about.

The sales tax burden comparison with Pennsylvania is a little better, as theirs stands at $378 per capita, but obviously any move on Maryland's part would add to Pennsylvania's current overall tax advantage.

A lower state income tax is indeed imperative if Maryland is to seriously promote itself as ''pro-business.'' The fact that our state finds itself in the bottom 20th percentile (44th) in job growth should speak volumes about the way Maryland is perceived by business. The combination of high tax burdens and the state's propensity to over-regulate everything is just not conducive to job growth.

Regulation needs to be moderated and can be done easily without sacrificing our quality of life. The executive and legislative branches of government, however, have chosen not to do so for they believe more government is the answer.

Maryland's job growth statistics prove them wrong.

High tax burdens need to be moderated and can be by reducing the size and cost of government. How many are aware that as of June 30, 1995, the state had 92,264 employee positions subject to budget control (source: Department of Fiscal Services) -- or one employee for every 52 Marylanders?

A planned program of attrition and retirements needs to be undertaken to reduce the work force by 5 percent annually over the next four years, which in itself would permit a 24 percent tax cut over that period.

Such a work force cut would result in one state employee for every 67 Marylanders, still rich by anybody's standards.

Until all Marylanders are willing to deal with the cost side of the equation, we are merely tilting at windmills.

Richard E. Hug


The writer is chairman of United Citizens for Maryland's Future.

Pub Date: 6/26/96

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