Thursday, January 12, 2012

Taxes, Jobs, & Deficits

The guv sure got this years General Assembly off to a somber start. The seats of the delegates and senators were barely warm when Martin O’Malley threw a couple three buckets of cold water on them, in the form of new taxes.

There’s the gas tax bucket, a flush tax bucket and a sales tax bucket. I would not be surprised if I missed a few. He says we need the money. We’re in the hole.

And yet, he also wants a $40 million increase in school construction funds. He also wants to increase spending on affordable housing projects to the tune of $15 million. Martin tells us that this is more about jobs than housing.

And that’s the problem.

In a recent presentation to Leadership Howard County, Anirban Basu, rock star regional economist suggested that Maryland relies way too much on government related jobs, more than any other state in the union and at the expense of attracting private sector business. He believes the state could begin to better diversify it’s employment and tax base by eliminating the state corporate tax.

“It’s only 5% of the state budget,” he argued. Eliminating it would attract more firms to locate in Maryland and help raise the states dismal job creation rate.

Some want to fix the budget with more taxes while others see salvation in eliminating them. The honest answer is that it takes a combination of both.

I have no doubt that the guvs initiatives will be heard and forcefully advanced but I wonder if those arguing for balance will be afforded the same courtesy.
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