Tax Plan

The news that 13 Catholic schools in the Baltimore area will close after this academic year has been traumatic for thousands of parents who now must scramble to find new places for their children to go. But if large numbers of them can't or won't switch to new parochial schools, the ripple effects of those closures will start to affect the region's public schools, too. With their budgets strapped as it is, public schools are ill equipped to handle an...

When Lori Brennan picked up the phone at Chesapeake Machine Co. on Monday night and the person on the line claimed to be calling from the White House, she wasn't sure what to think. "I thought they wanted us to start a job because we do so much government work," said Brennan, 26, an administrative assistant. But the call was the opening act in a days-long planning frenzy that culminated in President Barack Obama's tour of the East Baltimore manufacturing facility on Friday, while company employees listened to him unveil his job growth plans to the nation.

A new administration takes office in January promising to raise taxes on the wealthy. Then again, the weak economy and declining stock market could delay any tax changes until 2010. This makes year-end tax planning trickier than usual. "This is probably the most difficult year in my entire career" of nearly 30 years, says Bill Fleming, a director at PricewaterhouseCoopers in Connecticut. But with less than six weeks left, you need to figure out what steps to take before year's end to lessen your tax bill in the spring.

TAMPA, Fla. - Capitalizing on this year's Cinderella major league baseball team, Democrat Barack Obama kicked off a two-day swing through Florida yesterday with an appearance with players from the Tampa Bay Rays. Obama was introduced by David Price, who closed out Sunday night's victory over the Boston Red Sox in the American League Championship Series. The win propelled the team, known for its relatively small payroll, into the World Series for the first time. The candidates on the Republican ticket pressed their economic proposals in separate campaign stops, arguing that Obama wants to increase taxes.

Anne Arundel County Council members yesterday scrapped the proposed boost in the hotel tax and severely scaled back an affordable housing initiative yesterday as part of a laundry list of cuts to afford a pared-down budget for the school system. After two weeks of deliberations and hearings, school officials who met with the county auditor determined that they needed $21 million - not $51 million - to close a budget gap. Council members have rushed to fill that hole by cobbling together close to $14 million in new funding, taking $3 million from a health care account meant to cover future insurance claims and taking $3.8 million from the chief administrative officer's contingency fund.

Marylanders will feel a pinch in their pocketbooks every time they shop for clothes, buy a pack of cigarettes or get their computers fixed under the tax plan signed yesterday by Gov. Martin O'Malley. When the Democratic governor first unveiled his budget-balancing plan, he said 83 percent of residents would pay less in taxes. But after the General Assembly made several changes and dropped a proposed property tax break, only about 45 percent would pay less or see no change, O'Malley said yesterday.

The House of Delegates gave preliminary approval last night to a modified version of Gov. Martin O'Malley's tax plan after objections by Montgomery County Democrats nearly derailed his efforts to resolve Maryland's budget shortfall. Under the new plan expected to pass the House early this morning, the sales tax would not be extended to any additional services. Proposals by O'Malley and the state Senate to tax computer services, real estate management and health clubs drew widespread protests, as did an earlier House proposal to tax repair services.

Two of Howard County's three state senators sit on the Budget and Tax Committee and participated in key votes for the first set of changes that are reshaping Gov. Martin O'Malley's tax plan. Democratic Sens. Edward J. Kasemeyer and James N. Robey supported the committee majority in lowering O'Malley's suggested top income tax rate for Maryland's highest-income residents, while rejecting his idea for relief for people earning less than $15,000.

The Maryland Senate and House of Delegates charted divergent courses yesterday for closing a $1.7 billion budget gap, with the Senate approving a plan that increases the sales, tobacco and corporate income tax rates while House leaders pushed an alternative that more heavily taxes the wealthy and corporations. The Senate voted 24-23 yesterday to approve a plan that would raise more than $1.4 billion in new tax revenues a year. The measures now go to the House, where a committee approved alternate versions of the legislation yesterday.

Gov. Martin O'Malley's effort to make sure big corporations pay income tax in Maryland -- a proposal that has faced stiff opposition in the business community -- ran into difficulty in a Senate committee yesterday. Other elements of the governor's plan to resolve Maryland's projected $1.7 billion budget shortfall could also change in the coming days. In particular, his plan to expand the sales tax to real estate management and health clubs could be scrapped and replaced with new levies on other services, lawmakers said.