Tax Relief

Steve Walters has a modest proposal that makes Baltimore homeowners cheer and government bean-counters wince: slash the city's property tax rate in half. The Loyola University Maryland economics professor, pointing to the modern rebirths of San Francisco and Boston after tax revolts forced drastic rate cuts three decades ago, has long argued that Baltimore would become a much healthier city if it followed suit voluntarily. More people would move in, he says. More owners would fix up dilapidated properties.

Y ou have about six weeks left to make moves to cut your tax bill in the spring. Besides the usual tax strategies, such as making charitable donations before year's end, you might be able to take advantage of one of the many temporary tax breaks Congress created to stimulate the economy. One of them, the popular first-time homebuyer credit, was recently extended so you have more time to get it. But it's unclear whether others will survive. Congress isn't expected to pass any major tax legislation before year's end, although it will likely make a short-term fix to the estate tax so it doesn't disappear next year as scheduled.

Despite estimates that more residents might apply for Howard County's property tax credit for seniors, at greater cost to the county treasury, the number of applications seems in line with prior years, finance officials said. Through Sept. 14, the county had received 1,051 applications, compared with 1,175 for all of fiscal 2009. Last year, the program cost the county $447,300, compared with $371,838 so far this fiscal year. That does not count 168 homeowners eligible for a credit whose applications are awaiting review by state tax authorities.

The ka-ching of slots had only one appeal to Mayor Sheila Dixon - the possibility of lowering Baltimore's chart-topping property tax rate. The city took another step toward realizing the mayor's goal by concluding a profit-sharing lease agreement with the group that has proposed building a slots casino in south Baltimore. City residents sure could use a break on their property taxes; the city's rate is the highest in the state. But any cut in the rate will depend on the success of slots.

The Dixon administration and the group bidding to build a slots parlor in Baltimore have reached an agreement that could generate enough money to slash Baltimore's property tax rate by up to eight cents, officials said. "It looks like this process is going to move forward," said Mayor Sheila Dixon. "The goal was to try to reduce property tax. I know that we've got to do our best to get some [property tax] relief." If all goes as planned, the reduction in the property tax rate - now $2.268 per $100 of assessed value, by far the highest rate in the state - would be the largest single cut in recent memory.

Victims of New York financier-swindler Bernard L. Madoff will get tax relief from Uncle Sam, but not as much as some had hoped. The Internal Revenue Service issued guidelines yesterday that will help many of the 4,800 victims of Madoff's $65 billion investment fraud recoup some losses by seeking repayment of up to five years of past taxes. "Beyond the toll in human suffering - as entire life savings and retirements appear to have been wiped out - the Madoff case raises numerous tax and pension implications for the victims," IRS Commissioner Doug Shulman told the Senate Finance Committee.

The Obama economic team's announcement this week that it wants more tax relief for small businesses is good news for the economy. Small business today is larger than big business - it earns more money and employs more people - and while Wall Street bailouts may be necessary to preserve capital and liquidity, they are also likely to raise the long-term tax burden of Main Street. If this happens, we will be hurting the very businesses that we need to pull us out of the recession. The predominance of small business in the American economy didn't happen by accident.

WASHINGTON - President-elect Barack Obama's top advisers said yesterday that they won't back away from a promise to cut taxes on the middle class and raise them for the wealthiest Americans, as they made the case for a huge new stimulus package geared toward reviving the slumping economy. Speaking on Sunday talk shows and in a newspaper opinion piece, Obama aides stepped up a drive to build a broad political consensus behind Obama's core economic proposals: a two-year spending package that could exceed $775 billion, coupled with tax policies weighted in favor of the middle class.

In an effort to provide tax relief to homeowners, Republican Sen. Barry Glassman has filed a bill to freeze at current levels those properties due for re-assessment in 2009 and to recalculate assessments completed in the last five years so that those reflect today's market values. The proposal would mean the properties along the Route 40 corridor would remain at the assessment level established three years ago rather than go through the process, scheduled to begin in January and likely to show an increase in value.