Tax Collections

New state revenue estimates show an uptick in tax collections in January, good news for Maryland officials who had feared that lackluster receipts would force them to deeply cut this year's budget and rethink the spending plan now under debate in Annapolis. Estimates of income, sales and other taxes released by the Bureau of Revenue Estimates this week show state revenues are up by about 2.9 percent for the period running from July through January. The growth rate for July through December had been a percentage point lower, a trend that would have blown a $100 million hole in the current budget if it had kept up for the rest of the fiscal year.

TOP BOSSES and major shareholders at the late, lame Global Crossing contributed at least $300 million in taxes to the federal budget surplus in 2000, one can deduce from stock-sale disclosures and an awareness of the capital-gains tax rate. Honchos at Internet auctioneer eBay probably paid at least $100 million in capital gains taxes that year. And, all by himself, Microsoft's Bill Gates paid in the neighborhood of $1 billion in stock-sale-related taxes in 2000. Many things about the economy in recent years were not normal.

To get beyond all the spin from both sides about the state budget, take a quick look at Appendix F in the back of the budget highlights book Gov. Martin O'Malley released Tuesday. That's where you find the state's general fund summary and a forecast of what is likely to happen to Maryland's finances over the next five years. It is the Rosetta Stone of state budgets. Here's what it says this year: Governor O'Malley's spending plan would, if all goes according to plan, leave $274 million in the state's bank account at the end of fiscal 2011.

WASHINGTON -- The acting commissioner of the Internal Revenue Service issued an extraordinary public apology yesterday to four individuals -- and, by extension, to all American taxpayers -- for severe mistreatment at the hands of the agency.The tax official, Michael P. Dolan, also promised immediate changes to eliminate incentives for misconduct and to make the IRS more responsive to public complaints.At the conclusion of three days of hearings on IRS abuses before the Senate Finance Committee, Dolan said he was deeply troubled by the charges leveled against his agency this week by taxpayers, current and former IRS officials and outside watchdogs.

Internal Revenue Service Commissioner Charles O. Rossotti met at his Baltimore office last week with Richard C. Gross, editor of The Sun's Opinion * Commentary page, for a tax-time discussion of the IRS and its problems. What problems does the IRS. have that most need solving? We have to provide better service to the average taxpayer when they call us up or need help in filling out their return or fixing their account with us. And we're making progress on that, but we have more to do. The other big problem is we've got to make sure that we are as effective as we can be at finding taxpayers who don't appropriately pay their taxes.

Gov. Martin O'Malley has put much on the line with his decision to call the General Assembly into special session on Oct. 29. His purpose is not only to solve next year's $1.7 billion budget deficit but also to finally resolve the state's ongoing structural deficit - the growing gap between spending and tax collections - that has existed since the $1.3 billion Thornton aid to education plan was adopted in 2002 without a funding source. We opposed a special session. Our preference would have been for such a complex proposal to undergo the fullest possible review and for public involvement to be maximized during a 90-day regular session with a budget in hand instead of a shorter-term whirlwind without one. But the governor's argument that waiting until January would put the state $500 million deeper in the hole has some merit as well.

A quarterly poll suggests that some companies have soured on their expectations for Maryland's economy and on their view of the state as a business home. But more than a third of those surveyed still rated Maryland "business-friendly."In the survey, conducted by the University of Baltimore, 21 percent of companies queried described Maryland as "anti-business" or "business unfriendly," up from 15 percent at the end of 1997. The percentage of companies rating Maryland "business-friendly" fell from 51 in late 1997 to 43 now.Possible reasons for the change, said analysts at the university's Maryland Business Research Partnership, were the recent resignation of James T. Brady as Maryland economic development secretary and the apparent leveling off of Maryland's job growth.

In the latest battle between the states, officials in Virginia and Maryland are squaring off over whose budget-balancing prowess is greater. First, after Virginia Gov. Bob McDonnell announced his state ended the year with $544 million in cash, $234 million more than expected, the Republican Party there crowed that Maryland Gov. Martin O'Malley was, at the same time, predicting a $1 billion shortfall and floating the possibility of tax increases....

Thanks to a strong Christmas-shopping season, Maryland collected slightly more taxes than it expected during the last half of 1992 -- good news for the recession-weary state.Comptroller Louis L. Goldstein announced yesterday that collections of sales and income taxes were slightly above estimates. By contrast, tax receipts during previous six-month periods since 1991 came in below estimates, contributing to the need for repeated cuts to balance the state's budget.Nonetheless, Mr. Goldstein cautioned that the state's economy is not "out of the woods" yet. He noted that big companies are still laying off workers in Maryland.

Congratulations! You just filed your tax return. You and the Internal Revenue Service are quits for another year (barring mistakes and audits, of course).It was a hellish struggle. W-2. Form 1040. Schedule A. The work sheet to see if you need to file Form Something-or-other. Earned income. Unearned income. Early withdrawals from IRA. Alternative Minimum Tax. A 54-line form to separate $85 worth of capital gains into three categories.There must be, you are thinking, an easier way.In fact, many easier ways to collect America's taxes are under study.