Raise Taxes

ANNAPOLIS -- The Senate narrowly voted to raise taxes by $245 million yesterday in an action that fit the classic definition of a compromise: It made no one happy.Senators who voted yesterday, and the delegates who will be on the tax hot seat next, complained the tax plan was too big, or too small, or taxed the wrong things.The $245 million tax package was approved 26-20, just two votes more than the 24 required for passage.It would expand the state's 5 percent sales tax to cover a variety of products and services not now taxed -- everything from snack foods to dry cleaning to massage parlors to pay-per-view TV. It also would raise taxes on cigarettes by a dime a pack and increase by 50 percent the current taxes on wine, beer and liquor.

ANNAPOLIS -- A bill to restructure Maryland's unemployment insurance tax system and charge an immediate $61 million in additional taxes passed the Senate yesterday nearly unchanged from the version that passed the House two weeks ago.The 38-7 vote in favor of the legislation, written with the help of the Schaefer administration, virtually assures that the bill will become law this year.The higher taxes are needed, proponents of the measure argued, because the recession has depleted the state's unemployment insurance trust fund.

Howard County must radically slow the pace of its borrowing or raise taxes, County Executive Charles I. Ecker was told yesterday.With an election year coming up, Mr. Ecker said he has no plans for tinkering with the county's $2.59 property tax rate."

Michael E. Busch The campaign promises of 2002 are running afoul of the fiscal realities of 2003 for Gov. Robert L. Ehrlich Jr. And for a Republican who pledged not to raise sales or income taxes, the conflict is proving to be anything but easy. "If you made a pledge, it is impossible to break it without losing some credibility," said Charlie Black, a Washington-based Republican strategist. "I've seen people do it and survive, but it is always a negative for them." Ehrlich ran for governor on a rosy platform of avoiding tax increases by trimming government and legalizing slot machines, devoting the profits to close a staggering budget deficit.

WASHINGTON -- The tortuous, months-long quest for a bipartisan budget deal came to a conclusion yesterday, when congressional leaders shook hands with the Bush administration on a five-year plan to raise taxes, cut spending and slash $500 billion from the federal government's swollen deficit.After 12 days of intensive, almost round-the-clock closed-door talks, key Democrats and Republicans put the long-awaited finishing touches on the five-year budget plan yesterday afternoon. Now, however, that plan is to be put before the Congress, where rank-and-file lawmakers have already expressed dissatisfaction with many elements in the pact.

Sen. John McCain and the Republicans like to say that they would keep taxes low while Sen. Barack Obama and the Democrats would raise your taxes. But there is at least one area where a McCain administration would raise taxes on lower- and middle-income earners and on businesses. There was very little discussion at the Republican convention about health care. Mr. McCain referred briefly to his health care plan in his acceptance speech, but there are some important details of his plan that he conveniently left out. His health care plan would give all Americans a tax credit to purchase insurance, whether or not their employer offered coverage.

CHICAGO -- The old motto, "Honesty is the best policy," hasn't often been considered the route to success in politics.But that hasn't stopped Illinois State Comptroller Dawn Clark Netsch, running in the March 15 Democratic gubernatorial primary, from telling voters straight out that if elected she intends to raise income taxes -- to rescue long-neglected public education.In doing so, Netsch is following in the footsteps of Walter Mondale, who in 1984 announced in accepting the Democratic presidential nomination that if elected, he would raise taxes.

An expected rise in county trash-tipping fees could force the town to raise taxes for the first time in more than eight years, town officials said.At Wednesday's Town Council meeting, Mayor James C. Carlisle proposed a budget that includes a $3,500 increase for trash collection and no increase in the property tax rate of 45 cents per $100of assessed value.That proposal assumes county tipping fees will not increase by more than $10, from the current $15 per ton, said the mayor."We figure the tipping fee could go from $15 to $25 per ton," he said.

Midway through Monday night's tax protest, Councilman C. Vernon Gray threw in the towel.His plan to increase the piggyback tax from 50 percent to 52 percent for fiscal 1993 was all but dead, he said. The County Council still has to vote on the tax resolution tomorrow, but the votes for passage probably are not there. The piggyback tax is the percentage of state income taxes collected for local use."The council has not taken any action on the piggyback tax and is not likely to approve an increase," Gray said.

Lt. Gov. Kathleen Kennedy Townsend plans to release a detailed proposal for plugging the state's widening budget gap today, a plan she says can be accomplished largely without new taxes but not without pain. Townsend said yesterday that she has drafted a list of cuts for the $21.7 billion budget, which took effect in July. Most are one-time trims, she said, but a substantial amount are reductions in continuing operations, which would produce savings in future years. She said she has another list of cuts for the first budget that would be prepared by the next governor and become effective July 1. Townsend said she has developed a list of more than $1 billion in new revenue for the 2004 budget year and is pledging to not raise taxes if elected governor - with the possible exception of a tobacco tax increase.