Tax Policy

Disinclined as we may be to pity the plight of those making more than $500,000 a year, the state Senate, in its attempt to raise more revenue from such top earners, has gone too far. The Senate has adopted a plan that appears to be unique among the 50 states and would violate a cardinal rule of income tax policy, which is that a dollar earned should not cost more than a dollar in taxes. When the House of Delegates takes up the budget, it will have some work to do to clean this mess up. Gov.Martin O'Malleyproposed what remains the most sensible plan for raising new revenue through the income tax. Rather than changing the rates, his plan was to phase out some exemptions and deductions for the top 20 percent of Maryland earners.

What follows may sound like a message from the Dead Horse Beatings Division of The Aegis editorials operation, but it's a message that bears repeating: Government spending should be based on anticipated tax revenues, or, to put it another way, tax policy should not be adjusted simply because more government spending is approved. For the past several years, the state government, through a single term of a Republican governor and a term and a half from the current Democratic governor, has had the attitude that planning to spend more than is being brought in constitutes a "structural deficit" that can be resolved only by bringing in more revenue.

After reading the editorial "The GOP tax hike" (Dec. 22), an obvious question came to mind: How is it that not approving an extension of the Obama payroll tax cut is evil and anyone against extending it must be certifiably insane, yet when Obama wanted to end the so-called "Bush tax cuts" he was doing the right thing? I think that perhaps there may be a slight bias in your thought processes. Ed Roth, Ellicott

Dan Rodricks turned his editorial fire on me for standing up against income tax increases passed by the state Senate that would hit nearly all Marylanders in this sluggish economy ("Maybe Bobby Zirkin should be a Republican," March 20). Mr. Rodricks seems to believe that any Democrat who dares to speak against taxes or challenges party orthodoxy in any way is worthy of his scorn. Mr. Rodricks also apparently sees no problem with the type of divisive rhetoric that pits citizen versus citizen.

This Labor Day finds almost 17 percent of Americans unemployed or no longer looking for work. We must get them into the economy. They are prevented from working by government policies, and that is just not fair. Plus, we need them to help us handle our global competitors. Our country needs to create an economic and educational culture that welcomes our unemployed back in the fold and makes it easy for companies to invest in equipment that will lead to growth. What is the problem?

Dedicating tax revenues to specific government activities is all the rage among special-interest groups. But it is dreadful tax policy that should be resisted strongly by legislators.Backers of the state's shock-trauma system want a new "trauma tax" earmarked exclusively for preserving and enlarging emergency medical services. Supporters of the University of Maryland College Park want to cut funds for mass transit and road building and dedicate that tax money instead to college campuses. The Maryland Higher Education Commission wants to go even further, seeking higher business taxes to protect community colleges from recessionary budget cuts.

WASHINGTON -- Federal Reserve policy-makers might raise interest rates again because the U.S. economy could be growing too quickly, raising the risk that inflation is likely to accelerate, Fed Chairman Alan Greenspan told the Senate Banking Committee yesterday in the second of his semiannual reports on the economy and monetary policy.Greenspan, however, offered little elaboration on his warning -- identical to one he gave the House Banking Committee last week -- because senators were more interested in dragging the central bank head into an argument over tax policy.

Howard County may be one of Maryland's wealthiest places, but up to 15,000 residents don't have health insurance, thousands need drug treatment, child abuse cases are at a high level and social services staffing is down by one-third. Those disparities sparked a debate on tax policy among several legislators at a breakfast yesterday sponsored by the Association of Community Services, an umbrella group of local social service agencies trying to negotiate their way through Maryland's budget crisis.

WITH THE APRIL 15 filing deadline, many American couples discovered again that taking on a legal commitment to each other can cost dearly at tax time.The "marriage penalty" doesn't hit every couple, but why should it hit any? Tax policy has profound social consequences, and the effects of failing marriages -- and of the failure of parents to marry -- are taking a heavy toll at all levels of society.The "marriage tax" is felt largely by two-income couples, increasing their tax burden beyond what it would be if they remained single.

As millions of Americans rush to meet the deadline for reporting how much tax they owe on last year's income, a stealth tax increase has begun eating into the 2006 income of nearly 19 million households. Unless Congress takes action, one in four families with children - up from one in 22 last year - will owe up to $3,640 in additional federal income tax next April. Few of them realize that their taxes have increased, because Congress has not voted to raise taxes. Instead, Congress let a tax break expire.

Disinclined as we may be to pity the plight of those making more than $500,000 a year, the state Senate, in its attempt to raise more revenue from such top earners, has gone too far. The Senate has adopted a plan that appears to be unique among the 50 states and would violate a cardinal rule of income tax policy, which is that a dollar earned should not cost more than a dollar in taxes. When the House of Delegates takes up the budget, it will have some work to do to clean this mess up. Gov.Martin O'Malleyproposed what remains the most sensible plan for raising new revenue through the income tax. Rather than changing the rates, his plan was to phase out some exemptions and deductions for the top 20 percent of Maryland earners.

Maryland lawmakers appear to have more than a few quibbles with Gov.Martin O'Malley's proposal to raise taxes to help eliminate a projected $1 billion shortfall next year. So, with six weeks left in the legislative session, they are preparing to rewrite the budget game plan through some combination of spending cuts and new taxes. Uh-oh. Marylanders will recall the last time the General Assembly decided to take the initiative on taxes - specifically, a plan to broaden the sales tax base.

A few weeks back in this space, we noted it would be good for Harford County to be allowed to join every other state and county in the republic in levying a room tax on people who travel here to stay overnight in a motel or bed and breakfast inn. It is, after all, a tax we who live in Harford County pay every time we stay overnight in another county. Last week, the county's tourism lobby made it clear, once again, it supports such a tax. The tourism lobby sees such a tax as a way to pay for promoting the county as a tourist destination.

The governor's proposals to raise income taxes and charge sales tax on motor fuel have touched a raw nerve. The justification of jobs and public safety that was offered reeks of pandering to a scared populace. The only correlation that I see between jobs and public safety is the proliferation of police agencies over the last 20 years. Toll facilities, Transit, DNR, DOT, and the State Police all have a highly visible presence in the state, yet we need more. We have speed cameras that generate millions in income, but we need more.

OK, Madame Mayor: Count us in. You've pledged to increase Baltimore's population by 10,000 households over the next decade. My wife and I have just bought a charming city condo, and we're happy to put you one step closer to your goal. You should be happy, too, because we're in a key demographic. We're DILKs: dual income, launched kids. Because Maryland jurisdictions collect piggy-back income taxes on the basis of residential location rather than where wages are earned, our relocation decision carries a nice fiscal dividend.

After reading the editorial "The GOP tax hike" (Dec. 22), an obvious question came to mind: How is it that not approving an extension of the Obama payroll tax cut is evil and anyone against extending it must be certifiably insane, yet when Obama wanted to end the so-called "Bush tax cuts" he was doing the right thing? I think that perhaps there may be a slight bias in your thought processes. Ed Roth, Ellicott

Maryland lawmakers appear to have more than a few quibbles with Gov.Martin O'Malley's proposal to raise taxes to help eliminate a projected $1 billion shortfall next year. So, with six weeks left in the legislative session, they are preparing to rewrite the budget game plan through some combination of spending cuts and new taxes. Uh-oh. Marylanders will recall the last time the General Assembly decided to take the initiative on taxes - specifically, a plan to broaden the sales tax base.

Federal Reserve Vice Chairman Alice M. Rivlin warned Maryland legislators yesterday that cutting taxes wouldn't help attract businesses if public education and the state's infrastructure suffer in the bargain.Appearing before the House Appropriations Committee, the Fed's No. 2 official questioned the underlying premise of Gov. Parris N. Glendening's planned 10 percent decrease in the income tax rate: that the cut was needed to compete with neighboring states."Personally I'm a little skeptical about the usefulness of competitive tax reduction between states in drawing business into the state," said Rivlin.

In approximately six weeks the Maryland General Assembly will meet in a special session to perform its constitutional duty to reapportion the state for congressional districts. The reapportionment is necessary so congressional districts reflect the new population data from the 2010 census. During the special session it is important state legislators not waiver from their task of approving a reapportionment plan. For that reason, they should not consider any new taxes or major policy initiatives.

This Labor Day finds almost 17 percent of Americans unemployed or no longer looking for work. We must get them into the economy. They are prevented from working by government policies, and that is just not fair. Plus, we need them to help us handle our global competitors. Our country needs to create an economic and educational culture that welcomes our unemployed back in the fold and makes it easy for companies to invest in equipment that will lead to growth. What is the problem?