Gov. O’Malley touts low taxes as he calls special session to raise them

Maryland has some of the lowest taxes in the country, Gov. Martin O’Malley said Wednesday officially announcing plans to call a special session of the legislature to fix a budget impasse — partially by raising taxes.

Maryland has “the third lowest state and local taxes as a share of income,” O’Malley said, partially because residents have some of the highest incomes in the nation.

The state has “the ninth lowest sales tax,” he said, a figure he’s cited several times this year as he’s proposed applying the sales tax to gasoline. Also, it has the eighth lowest business taxes on mature firms and the 12th lowest rate on investments in new firms.

How can this be, when Senate Republican Leader E.J. Pipkin lambasts O’Malley as “tax-happy?”
“According to the American Tax Foundation, the citizens of Maryland already bear the brunt of the nation’s fourth heaviest tax burden,” Pipkin said in a release Wednesday.

Similar sources, different conclusions

Surprisingly, according to the governor’s press office, O’Malley and Pipkin rely on some of the same sources for their information, including the Tax Foundation, a longstanding tax-adverse group whose data is frequently used to berate Maryland for its high taxes and bad business climate.

O’Malley’s reference to “third lowest state and local taxes as a share of income” comes from the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institutions. For 2004-2009, it ranks Maryland 49th in state and local “general revenue as a percentage of personal income.”

The Tax Foundation calculates the number differently than the Tax Policy Center and ranks Maryland as 12th highest in the nation for state and local taxes as a percentage of state income.

In the Tax Foundation calculations, Virginia ranks 33rd; Pennsylvania, 10th; Delaware, 23rd; D.C. is 24th, and West Virginia, 27th. But the percentages cover a very limited range with Maryland taxes at 10% of personal income (tied with Massachusetts); Pennsylvania is at 10.1%, and Virginia is at 9.1%. The state with the highest tax burden is New Jersey at 12.2%.


Read more: http://marylandreporter.com/2012/05/10/gov-omalley-touts-low-taxes-as-he-calls-special-session-to-raise-them/#ixzz1umcvXGQz
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