Tax And Spending

AS THE DOW JONES average floats merrily above the 5000 mark and interest rates keep dipping ever so nicely, balanced-budget negotiators on Capitol Hill would be wise to heed Federal Reserve chairman Alan Greenspan's admonition.If they fail to come to an agreement and allow tax and spending issues to remain unresolved through the 1996 election campaign, Mr. Greenspan warns, "there will be a sharp increase in long-term interest rates." And, of course, a sharp drop in stock prices.His words are of far greater significance than the current posturing in budget talks.

Gov. Martin O'Malley's budget proposes a $1.4 billion increase in spending over last year ("O'Malley offers $37.3 billion plan," Jan. 17). Spending has increased 26 percent since 2008, taxes have been raised 24 times and high-income earners have fled the state due to unfriendly tax policies. Bechtel and Northrop Grumman have moved to Virginia, along with hundreds of thousands of jobs. Now a 15-cent increase in gas tax? Florida, Tennessee and Texas have no income tax, Indiana is calling for a 10 percent tax cut. New Mexico's governor has called for slashing corporate taxes to 4.9 percent.

MARYLAND'S two contenders for governor hold starkly different views on tax and spending issues. It's where the liberal-conservative gulf between Gov. Parris N. Glendening and Republican Ellen R. Sauerbrey is most apparent.Ms. Sauerbrey's prime theme, as it was in 1994, is tax cuts -- a fat reduction in income tax rates and far lower taxes for seniors. Mr. Glendening's focus is on enlarging state programs. You name it and he's promised more money.Neither candidate is being candid. The Republican challenger avoids the unpopular question of how she would underwrite such huge tax cuts; the Democratic incumbent fails to explain how he would finance his add-ons.

With the fiscal cliff surmounted, at least temporarily, a new Congress sworn in and Republicans licking their self-inflicted wounds, it is tempting to theorize that a new political reality has taken hold in the nation's capital - one where the American economy won't be taken hostage by the House GOP and Washington won't bounce around from one trumped-up crisis to another. The best evidence of this would be the lopsided and bipartisan votes in favor of the final tax package approved by both the House and Senate.

Halfway through its annual 90-day session, the Maryland General Assembly faces an imposing array of unresolved issues. The state's on-going recession and the impact it is having on tax and spending policies adds even more uncertainty to these State House deliberations.With revenue forecasts changing every few weeks, House and Senate budget panels have gotten a late start focusing on the specifics of Gov. William Donald Schaefer's $11.6 billion request. When the budget-cutting begins in earnest, a vast array of social service programs could be adversely affected.

Given the turmoil over tax issues in Annapolis this session and the lack of statesmanship shown by many senators and delegates, it was inevitable that some minions would stage a palace revolt against House Speaker R. Clayton Mitchell and his tax and spending package. Their misguided and irresponsible stance, if it sways the House, would plunge Maryland into a fiscal crisis of immense proportions.Somewhere along the line, someone in the State House has to have the courage to propose the unpopular.

How that two roisterous party conventions are out of the way, George Bush and Bill Clinton can get down to the serious business of a marathon slugfest until American voters register their verdict in November. At this stage, this can be said: It could be a Clinton blowout or a Bush squeaker; the reverse is not likely.What handicaps the incumbent president is a persistent recession that won't go away. Shortly before his acceptance speech Thursday night, the government reported a perverse jump in unemployment benefits claims.

LAS VEGAS -- President Clinton yesterday firmly rejected the Republican budget proposal, declaring that it "shortchanges our nation's future" by eliminating nearly all of his new domestic initiatives on education, job training and child care.Employing sharply partisan language and speaking to a cheering, sympathetic crowd of union members of the AFL-CIO, Clinton set out on a collision course with theRepublican-controlled Congress over how the nation should spend its first projected surplus in 30 years.

It has been a taxing year in Harrisburg. State legislators and Gov. Robert P. Casey have been locked in a bitter and prolonged battle over how to close Pennsylvania's $3.5 billion budget gap. In the end, reluctant lawmakers capitulated and gave the governor what he wanted -- including a whopping $2.8 billion tax increase. As a result, 100,000 state workers who haven't been paid in a month will receive overdue pay checks this Friday.But Pennsylvania's citizens will pay a heavy price for this compromise.

NOWHERE IN MARYLAND is the debate over tax and spending policies more heated than in the Washington suburbs. Prince George's and Montgomery County voters will decide next Tuesday which is more important to them: Money for schools and police or lower local taxes?Both jurisdictions already have voter-imposed property tax caps. But P.G.'s 18-year-old cap, known as TRIM, is starting to hurt. Schools and the police are in dire need of more money, but there is no flexibility under TRIM. County Executive Wayne Curry wants to repeal TRIM and raise property taxes to help pay for $63 million in new aid for education, police, fire, libraries and public health.

There is just no end to Gov.Martin O'Malley's tax-and-spend program. Recently, he indicated that he will propose a 6 percent sales tax on all wholesale gasoline purchases. His excuse now is that wants to use the money for transportation projects. As the price of gasoline is likely to surge toward $5 per gallon this summer, there just is no relief in sight. This makes it the second time that Mr. O'Malley has proposed a major tax increase this year, as he floated the idea of raising the retail sales tax from 6 percent to 7 percent on the opening day of the General Assembly session.

Regarding your story on the legislative session that opens this week ("Big 'to do' list in Annapolis," Jan. 9): You gotta love House Speaker Michael Busch: He's so tenured, so entrenched and so oblivious to the nonsensicality of his own words when he says things like "I'm going to pass a tax increase," and "we're going to put people back to work. " His is a truly warped understanding of how a free market economy is supposed to function. To think that by taking ever more money from citizens the government can engineer sustainable economic growth is both presumptuous and doomed to failure.

It is good to see a Democrat - Maryland Comptroller Peter Franchot - who does not pay homage to the tax and spend (as much as they can get away with) economic philosophy of the left ("Franchot drifts right," Dec. 26). Hopefully, he is keeping our alabaster nanny, Gov. Martin O'Malley, awake at nights. Common sense (and not political vote buying) has to prevail at some point. Lyle Rescott, Marriottsville

It's not surprising The Sun stands with the Democrats' proposal to cut $1.2 trillion from the deficit by imposing a $1 trillion tax increase ("Next, the voters' turn," Nov. 23). But to claim, as you do, that the public agrees with this never-ending tax-and-spend policy is proof of how far the newspaper will go to prop up the Democrats. Your claim that President Obama and the Democrats on the supercommittee offered up plans in line with the Bowles-Simpson commission is totally baseless.

Shame on Gov, Martin O'Malley and the General Assembly for talking about raising taxes and fees during a major recession. With gas prices hovering around $3.50 per gallon, we don't need any more burdens placed on us. It appears the only way Maryland residents and businesses can escape the clutches of tax-and-spend Democrats is to vote with their feet and move to a more fiscally friendly state. John A. Malagrin, Baltimore

I am fed up with the over the top criticism the tea party congressmen have been getting from members of the Obama Administration, Democrats in the Senate and the House, liberal pundits, and even from the inside the beltway Republicans who don't appreciate the fact that if it were not for the tea party freshmen class in the House, the Democrats would have remained the majority party. Vice President Joe Biden most recently called the tea party members of Congress "terrorists. " Other liberals have labeled tea party advocates as stupid or dangerous.

If state legislators are looking to constituents for guidance on tax and spending issues, they're out of luck. A University of Baltimore poll shows that Marylanders are deeply divided on these questions. Slightly more than a third want to raise taxes; slightly less than a third want to cut services and most of the rest want to do both. How's that for a murky mandate?Or take another survey, undertaken by the Maryland division of the American Automobile Association, which found that nearly as many club members favor a rise in the gasoline tax as oppose it. No clear signal there, either.

The retreat from reality continues in Baltimore County. Its legislative delegation has become a captive of the anti-tax crazies. More accurately, these malleable officials have marched into the "something for nothing" camp themselves.It is understandable that legislators differ on the need to raise taxes. But no legislator should be of the opinion that government can operate without a budget. Yet there were 15 of 22 Baltimore County delegates and 6 of 7 senators voting against passage of a budget nine days ago. It was a vote for anarchy.

Picking up the newspaper recently, I've noticed that the same topics seem to be dominating most of the local headlines: in-state tuition for illegal immigrants, higher tolls, gay marriage, state workers forced to pay union dues, crime at theInner Harbor. But the topic that affects all Marylanders the most - the state's shaky economy and resulting business and job losses - doesn't seem to be garnering the attention it deserves. About a month ago, The Sun's Jamie Smith Hopkins reported that Maryland ranked last in the nation in job creation - 50th out of 50 states, according to the U.S. Department of Labor.

Two reports came out last week that seemed to present a puzzling paradox. On the one hand, the Tax Foundation issued its annual rankings of state business friendliness based on taxes, and it pegged Maryland as sixth worst. On the other hand, the Census Bureau released figures showing that, once again, Maryland is the richest state in the nation, with a median household income of $70,545, about $1,500 more than last year. What gives? Sure, there are plenty of reasons in Maryland's case why business friendliness and prosperity wouldn't necessarily go together.