Legum’s New Line

To close Maryland’s widening budget gap, the state has slashed spending for cancer research, reduced reimbursements for health-care workers, cut spending for transportation projects, furloughed state workers and raised the sales tax.

Meanwhile, half of the state’s largest for-profits corporations pay zero taxes to Maryland.

Maryland is among the states that still allow corporations to “shift money between subsidiaries to veil profits and avoid paying taxes.” For example, Toys ‘R’ US avoids paying taxes in Maryland by shifting its profits to a tax free subsidiary in Delaware. A legislative fix to the problem, called “combined reporting,” was defeated in the Maryland General Assembly in 2007. Requiring combined reporting for corporations in Maryland could raise as much as $125 million per year in additional revenue.

In 2007, the Washington Post described the General Assembly’s failure to act as “another air kiss to the deep-pocketed set.”

Twenty-one states representing 51% of the U.S. economy now prohibit corporations from avoiding state taxes by requiring combined reporting. Since Maryland is not among them, we are now paying the price.

[HT: Del. Saqib Ali]

1 Comment »

Maryland Comptroller Peter Franchot has launched a YouTube channel. The first video, posted today, is satirical music video entitled “Real Taxpayer of Genius,” encouraging people to fill out their taxes online. Watch it:

The video is a spoof of Bud Light’s”Real American Genius” commercials.

[HT: Maryland Politics]

Comments Off

One of Maryland’s top Democratic elected officials said yesterday that he supports raising the gas tax and increasing tuition to close the state budget shortfall. The Washington Post has the story:

Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) told a gathering of local leaders today that he believes the state should allow universities to raise tuition and increase the gas tax as it looks to close a growing budget shortfall.

…Miller said without new revenues, there is no state money for transportation priorities, including the construction of the Purple Line, a proposed mass transit link between Montgomery and Prince George’s counties.

The problem with raising the gas tax, particularly in a down economy, is that it disproportionately impacts the middle class. The people who use the most gas aren’t necessarily the richest. And there are many areas of Maryland where driving is the only way to get to work. That means the middle class and the working poor, two groups already struggling to make ends meet, would have an additional financial burden.

Comments Off