Tax Issues to Face Tough Debate

In an opinion piece for the Gazette, Barry Rascovar discusses the tough road ahead to for  tax issues during the next 6 weeks of session.

Gov. Martin O’Malley — with his eyes firmly fixed on creating a national reputation for himself through an ambitious, liberal agenda in Annapolis — has given the legislature a task filled with political dynamite.

He wants lawmakers to pass a basketful of tax levies — on pleasure boats; on gasoline; on water consumption; limiting itemized income tax deductions and personal exemptions; taxing some Internet sales; taxing more tobacco products; taxing digital products for videos, music and software, and taxing precious metal coins.

He also wants to impose an indirect “tax” on local governments by forcing them to pick up half of their teacher pension costs — a quarter-billion-dollar item.

According to the editorial,  “at least three of O’Malley’s taxation plans are in jeopardy.”

The gas tax. With prices at the pump heading beyond $4 a gallon, passage of a bill adding 8 or 9 cents a year for three years won’t pass. Lawmakers will have to ditch O’Malley’s ill-conceived plan and devise an alternative.

Cuts in itemized income tax deductions and personal exemptions for anyone earning over $100,000. This amounts to a tax on the upper-middle class. In places like Montgomery County, that encompasses a big chunk of voters. This proposal also will have to be junked and another revenue-raising plan substituted. Look for a bill that ups taxes on the truly rich, not hard-working, two-income families.

The indirect “tax” on county governments forcing them to pay 50 percent of teacher pensions. Strong opposition from the counties makes it nearly impossible to pass this measure as submitted by the governor, especially without the phase-in period contained in previous bills.

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