Sales Tax

Imagine you are a benevolent monarch and you have the power to institute a sales tax. (Even benevolent government has to be financed, after all.) Would you set one up that gave preference to sellers located outside your kingdom and penalized your own subjects? Would you go further and discourage those outsiders from even setting up shop in your country? Of course you wouldn't. That would be crazy. And while there are plenty of examples of insane heads of state, they aren't usually beloved by their people.

ANNAPOLIS - A bill being sponsored by eight Republicans in the House of Delegates to exempt college textbooks from the sales tax had its first hearing this past week in Annapolis. House Bill 38 calls for no sales tax on textbooks purchased in Maryland by part- or full-time students attending a college or university. It's initial hearing was held Jan. 25. "The price of textbooks of $500 for a semester is not unusual, and this is a tremendous burden, especially on middle-income families," said Del. Wade Kach, who represents District 5B and is a co-sponsor of the bill.

A Senate committee listened Tuesday to the pros and cons of expanding Maryland's sales tax base to include more services, as well as goods purchased over the Internet. The Senate Budget and Taxation Committee spent the day in Annapolis receiving briefings on taxes, the federal debt ceiling, education funding and toll increases. Legislative committees meet occasionally between the 90-day General Assembly sessions. Tangible products, but few services, sold by Maryland retailers are taxed at 6 percent.

Retail analysts reported a curious trend this Black Friday. On the traditional first shopping day of the Christmas season, the number of visits to malls, big box stores and other retailers increased, according to the analytics firm ShopperTrak, but the amount spent in brick-and-mortar businesses actually went down slightly from last year's total. Online shopping, meanwhile, jumped ahead of its traditional Cyber Monday kick-off and exceeded $1 billion on the Friday after Thanksgiving for the first time.

What next? Maybe a tweet: "@GovernorOMalley en route to watermen's conference on shore. Wouldn't it be cool if the #BayBridge were #BayTunnel instead? Calling @MDTA now... " Forget all that stuff you learned in civics class about lining up your legislative ducks first, or hammering out back-room compromises, or even issuing executive orders. Last week, Gov. Martin O'Malley introduced us to government by random rumination. O'Malley took the occasion of the opening of the General Assembly to note, oh so casually, that he'd like to see a penny increase to the sales tax. How casually?

Gov. Martin O'Malley wants to apply Maryland's 6 percent sales tax to gasoline, a change that at current prices would add 18 cents a gallon to the cost at the pump. The increase — to be phased in over three years —would be on top of the 23.5 cents per gallon gas tax the state has been charging since 1992. The change would require the approval of the Maryland General Assembly, where its prospects are uncertain. O'Malley's proposal — which comes as he also is calling for higher income taxes and sewage treatment fees — drew cries of protest from the service station industry and Annapolis Republicans, among others.

As if Gov. Martin O'Malley didn't have enough opposition to his proposal to apply Maryland's 6 percent sales tax to purchases of gasoline, he now he faces an insurgency within his own party. Comptroller Peter Franchot, building on his previous objections to a gas tax increase, will hold what he's calling an "informational roundtable" on the issue Tuesday in Annapolis. Ostensibly, the noon event at the Louis L. Goldstein Treasury Building will be an opportunity to "clearly lay out how the Maryland tax on gasoline is regulated and administered" and to answer technical questions.

In answer to the Sun's question to it's readers, "would you rather see Maryland sales tax rise or see the gas tax rise?" ("Annapolis gridlock," Jan. 3), I say, "None of the above!" Why won't one of the most expensive states to live in even consider cutting spending, for once, instead of continually shoving it's greedy paws into the pockets of hard working Marylanders? What's wrong with eliminating all the pork that is unilaterally heralded by our almost entirely Democratic government?

Of 882 callers to SUNDIAL, 159, or 18 percent, say they think a 1-cent increase in the sales tax is a fair way to raise state revenue. Only 104 callers (11.7 percent) say the sales tax should remain at the same rate but be broadened to cover more items and services. The remaining 619 callers (70.1 percent) say neither approach is necessary."It's Your Call" represents a sampling of opinions from certain segments of the community, but it is not balanced demographically, as a scientific public opinion poll would be.

The early results of Maryland's sales tax holiday are in: Retailers liked it. So did their customers. But tax policy wonks? Not so much. It will be a couple of months before the state finds out just how much it lost in sales tax revenue during its third annual back-to-school tax holiday. The state had estimated that it would forfeit about $10 million by waiving the 6 percent sales tax on clothing and shoes of up to $100. Is this good fiscal policy? Probably not. Is this money that could be better spent elsewhere by the state?