Tax Collections

To economists and budget gurus, an economic downturn is often a statistical event, an event marked by drops in indexes, housing starts, tax revenue and other abstractions.To someone dependent on a state-subsidized home or even to someone who is driving to work each day, an economic downturn is almost always a real event burdened with drops in pay, rises in costs and an increase of uncertainty."A decrease in money from the state or county would drastically decrease services," said L. Marie Kienker, bureau chief of the county's Housing and Community Development Office.

TO THE surprise of virtually no one (except, apparently, Governor Schaefer), Maryland ended the 1992 fiscal year with a deficit of $70 million and opens the books on fiscal year 1993 with a gaping hole predicted to be three times that size. In all, fiscal year 93 expenditures are expected to exceed revenues by some $240 million.Clearly, the major tax increase passed this year over the unanimous objection of the House Republican Caucus hasn't cured the state's budget problem. The governor thought he would have more money to spend, but folks just aren't paying the taxes he expected to collect.

The General Assembly will not cut income taxes this year despite having a $1 billion surplus, key lawmakers said yesterday. They said the state should instead spend its riches on education and other priorities. Their assessment came after state officials announced that Maryland's fiscal picture -- while still rosy -- isn't getting any rosier. The release of revenue projections for the next few months dashed any remaining hopes to cut income taxes this year. "You can't spend and cut at the same time.

As the regional economy chugs forward, the state of Maryland finished the past budget year with a $1.2 billion surplus, according to figures released by Comptroller William Donald Schaefer yesterday. The final accounting for the 2005 fiscal year, which ended June 30, provides the governor and state lawmakers with the best news they've had since taking office in January 2003. At the time, a financial downturn prompted a state hiring freeze and some program cuts. Gov. Robert L. Ehrlich Jr.'s office reaffirmed yesterday that he hoped to return some money to Marylanders through a tax reduction.

CONSERVATIVE DEFENDERS of supply-side economics are now arguing that President Clinton's plan to raise taxes on the rich is not just unfair -- it's also futile. If you raise tax rates on the rich they will just spend less time earning income, and work harder at tax avoidance.These people have no shame, and they assume we have no memory. This set of claims mirrors the supply-side predictions of the early 1980s that lower tax rates on the rich would yield increased revenues. And the latest arguments against taxing the rich are just about as accurate.

Heat and noise have been the main products of the legislative debate over Maryland's business climate lately. A business-sponsored research group tried yesterday to shed a little more light.The Maryland Business Research Partnership published what it called the most detailed report yet on this state's status as a place to employ and be employed.As befits the increasingly competitive trade of interstate business recruitment, the study offers precise evaluations of Maryland's prospects that even a bookie could love.

WASHINGTON -- You think Maryland has fiscal problems? New Jersey officials were so desperate this year that they sold off part of Interstate 95.California raised taxes by $7 billion. The Pennsylvania legislature approved a record $3 billion tax increase. Connecticut imposed a personal income tax for the first time.In all, 34 states and the District of Columbia have raised taxes by $16 billion, the largest increase ever. Most states also have cut budgets. Added up, this is one of the worst years state officials can remember.

The state Senate voted Thursday to significantly raise taxes on Marylanders earning half a million dollars or more — prompting complaints that liberals were bent on launching class warfare in the state. The Senate's vote to adopt what is being dubbed a "millionaire's tax" came after some liberal-leaning senators said they would refuse to support a smaller, across-the-board increase in income taxes unless the wealthy took a special hit. The chamber was considering a plan to raise taxes on most Maryland taxpayers by up to a quarter of a percentage point — a proposal that eventually passed by a vote of 26-20.

It comes as no surprise that Gov. Martin O'Malley and former Gov. Robert L. Ehrlich Jr. are duking it out in this fall's election over their respective records as Maryland's chief executive. Evaluating who did a better job running the state is important. But so is a sense of where either man would lead us during another four (or, in Mr. Ehrlich's case, potentially eight) years in office. Mr. Ehrlich recently released "Roadmap to 2020," a compendium of ideas he hopes to pursue. It is vague in many of the specifics and frequently fails to address circumstances that have changed since he left office.

Uncle Sam has gotten much better at collecting the taxes we owe. But better isn't good enough, says a General Accounting Office report.The IRS pulled in about $1 trillion in 1989. But as of Sept. 30, 1990, taxpayers still owed about $72.2 billion, plus an additional $24 billion in interest and penalties.In 1983, the IRS introduced an automated collection system, which uses phones and computers to settle claims. It replaced a manual system that depended on written notices.The system worked so well that 21 ACS centers now do the work of 73 manual offices with half as many people.