IT'S TIME to cut sales taxes in Maryland.
This week, thousands of Maryland's families enjoyed outfitting their children during a tax-free week of "back-to-school" shopping. The General Assembly exempted clothing under $100 from taxation for the week, giving average Marylanders a break while ensuring that genuine luxury items remain taxable.
Maryland's legislature ought to be commended for looking out for middle- and low-income Marylanders who will not have to shell out more to outfit their children. Clothing a family is expensive enough on a limited income.
Next session, the General Assembly would do well to extend this suspension of sales tax by an additional 51 weeks.
While back-to-school shopping means big business for our retailers, the purchase of essential clothing occurs year-round.
As cold weather approaches, children and adults alike require sweaters, sweatshirts, hats, gloves and other items. Any parent knows that kids outgrow clothing in every season, not during one week in August. The holidays account for a huge percentage of clothes purchases - and December is no less burdensome on working families than August.
Eliminating the sales tax on non-luxury clothing will help families, but it must be done responsibly. Legislators like Sen. Barbara Hoffman (D-Baltimore) who were skeptical about the tax-free week had good reason to be wary. State government requires revenue to service citizens, and reducing resources that could be invested in improving schools, upgrading our infrastructure, removing lead paint from housing and making our communities safer cannot be taken lightly.
That is why cutting sales tax revenue year-round should be offset with a corresponding increase in revenue from those who can most afford it - the top income earners in the state, and through experimenting with "green" taxes, which raise revenue according to waste and emissions produced. "Green" taxes create a public benefit by providing economic incentives for reducing pollutants and excess refuse.
There are models for drafting a more fair income tax structure. Several years ago, Sen. Paul Pinsky (D-Prince George's) and Sen. Perry Sfikas (D-Baltimore) introduced legislation to shift the income tax in a more progressive direction. Their bill would have placed more tax responsibility upon the richest 1 percent of Marylanders, whose annual incomes average over one-half million dollars. The Pinsky-Sfikas legislation would be a good starting point for legislators looking to create an improved tax system.
Sales taxes are an inherently regressive method of raising revenue because they take a disproportionate share of money from those who can least afford it - working- and middle-class citizens -rather than from the wealthiest.
According to Citizens for Tax Justice, on average poor U.S. families pay over six times more than the wealthiest families on sales and excise taxes as a share of their income. Middle-income families pay four times as much.
Maryland should seek fairer methods of raising revenue by reducing the financial impact on low- and middle-income families. This "tax-free" week of shopping is a small step in that direction, but it should be extended year-round, and the wealthiest Marylanders should bear their fair share of the income tax.
Especially as federal tax cuts are flowing disproportionately to those of upper income, now marks an especially appropriate moment to seek tax justice in Maryland.
Eric C. Olson is a member of the College Park City Council.