Richard Douglas - Candidate for US Senate - 2012

Maryland's Business Competitiveness at Stake

with Sales Tax Hike 

News Release 4.4.12

As the General Assembly prepares to adjourn April 9, Maryland tax advocates are attempting a last minute "hail mary" to justify the spend and tax policies of this administration.  Transportation spending proponents are holding press conferences today in Annapolis, Baltimore and Potomac to complement Governor Martin O'Malley's most recent proposal to hike the sales from 6% to 7%.

An attempt earlier in this legislative session to apply the sales tax to gasoline proved politically impossible, and the Governor has signaled his intent to instead raise the sales tax across-the-board to provide additional government revenues, purportedly for transportation.

" As the Governor said himself, all this proposal does is delete the word 'gas' from ' tax.' A sales tax increase is an easy, unacceptable short- term fix to the longer term problem of business competitiveness," said Maryland Business for Responsive Government President Kimberly M. Burns.  "Just like the gas tax, it hits every Maryland working family and business right in the wallet."

With a 7% sales tax, Maryland would join a group of states with the second-highest rate according to the non-partisan Tax Foundation.  Mississippi, New Jersey, Rhode Island, and Tennessee, with a 7% sales tax, fall in a second-tier just below California as states with the highest taxes on purchases.  If Maryland were to adopt a 7% sales tax, moreover, it would have the highest such tax in a region that includes Delaware, the District of Columbia, Pennsylvania, Virginia and West Virginia.  Virginia has one of the lowest sales tax structures in the country and Delaware has none.

"Say hello to more factory outlet stores near Maryland's borders in Delaware and Virginia," said Burns. "When you're a small state like Maryland, sandwiched between two low-tax states, it's foolish to think increasing the sales tax won't effect Maryland's competitiveness and the behavior of consumers."

Maryland Business for Responsive Government favors a fiscal approach that addresses budget cost savings instead of tax increases.  As an example of many such opportunities, the Maryland Department of Transportation and the Department of Business and Economic Development have received scathing audits for wasteful and sloppy procurement practices.

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Background:

Transportation press conferences today:http://www.tripnet.org/

Tax Foundation: State and local 2012 sales taxes:http://www.taxfoundation.org/news/show/27967.html