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The General Assembly in November 2007 enacted an historic overhaul of the state's regressive income tax system, making the income tax code more progressive, asking corporations to pay a fairer share of taxes, protecting most vital public investments, and actually expanding health care coverage. While the package contains some regressive elements, such as an increase in the sales tax, those are outweighed by progressive income tax reform, an overdue increase in the corporate income tax rate, and preservation of the public sector. This package is a win for working families.
Preservation of public sector investments is a virtue of the package too easily overlooked. Blue-collar families rely more on government services than do the wealthy. Regular folks don't live in gated communities, that's why they need safe streets; they have trouble affording health insurance, that's why they need government to step in and correct this market failure; they don't belong to country clubs, that's why they need good parks; they don't go to private schools, that's why they need world-class public schools. The fiscal package -- which passed thanks to years of hard work by Progressive Maryland and allies as well as inspired leadership by Gov. Martin O'Malley and legislative leaders -- preserves Maryland state government from draconian budget cuts. And in the future the package could generate even more new revenue to expand health care coverage and for other goals.
The product of compromise, this huge reform is of course not perfect. It contains $550 million in spending cuts, hurting a number of important services. Lawmakers need to implement more targeted relief for the poorest taxpayers, such as a sales tax credit. And for reasons we can't understand, the State Senate decided to let off scot-free many giant multistate corporations that pay no state income tax by failing to enact combined reporting, the proven reform that comprehensively closes tax loopholes. PM and allies will keep fighting for that long-overdue reform, and we will win. (Read Progressive Maryland news release and Baltimore Sun article). Key elements are:
Mid-session floor votes on the House and Senate tax bills:
Progressive Maryland's Matthew Weinstein (top photo) and Henry Bogdan of Maryland Budget & Tax Policy Institute (lower) explain policy proposals to hundreds packing the room at Alliance for Tax Fairness Town Hall Meeting Nov. 6 at Annapolis Elementary School. See "Top Ten List of Urgent Needs" and Fox TV-45 report.
The Alliance for Tax Fairness was created earlier this year to support solutions to the state fiscal crisis that accomplish two goals:
With your help, we will educate and involve the public to have a voice in solving this crisis that threatens Maryland's future prosperity and quality of life.
Please note: The Alliance For Tax Fairness is a broad coalition of groups working together to achieve these goals. Different organizations in the coalition hold different positions on specific revenue options. The material presented on this website is educational only and is not necessarily endorsed by all members of the coalition.
Learn more about progressive tax reform from Progressive Maryland's:
Matthew Weinstein (above, center), Progressive Md. Baltimore Regional Director, unveils Maryland's "Top Ten Unmet Needs" at the Alliance news conference Oct. 30 on Lawyer’s Mall outside the State House in Annapolis. Many press attended (below).
Matthew Weinstein addresses leaders of 53 groups at a Sep. 10 Alliance meeting
Alliance For Tax Fairness' Public Opinion Poll on Budget and Taxes
Maryland state government faces an approximately $1.5 billion deficit next year and for years to come. As solutions, lawmakers have focused mostly on cuts and only enough revenue increase to plug the fiscal hole. The Alliance for Tax Fairness was formed to advocate for a a different, fairer approach that does not unduly burden middle-class families and locally-owned businesses. That's the approach favored by a solid majority of Marylanders according to a June 2007 poll of 500 registered Maryland voters, the Alliance released at its July 25 news conference in Annapolis. The poll evaluated residents’ concerns about the state budget deficit, taxes and spending levels, and revenue increase that could balance the budget and pay for new investments. Take action now!
Poll finds Marylanders want a fundamental fiscal overhaul, not just a deficit solution:
The poll finds that the most popular revenue measures are the fairest:
Maryland taxes corporate income and income of highest-earning individuals at some of the lowest effective levels in the country, yet we have many unmet needs in funding education, health care, and protecting the environment. Lawmakers should go beyond plugging the hole in the budget and create a fairer tax system that asks big corporations and individuals to invest in Maryland's future.
Multi-state corporations exploit tax loopholes to avoid paying Maryland taxes. That puts local businesses at an unfair disadvantage. Maryland should make sure big corporations cannot hide their profits and instead make them pay their fair share.
President George W. Bush has handed the wealthiest people in Maryland large federal tax cuts. It's only fair we ask them to invest some of that in Maryland's future.
Disclaimer: This site features a wide range of research that makes the case for progressivity and that discusses various specific means of achieving greater tax fairness. Not all members of the Alliance for Tax Fairness have endorsed specific proposals that are discussed on this site.
