Maryland Shelters the Rich and Taxes the Poor

Posted on March 31, 2008

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The TV news reports millionaires with mattresses strapped to the roofs of their Mercedes and Jaguars. They’re clogging the bridges, escaping across the Potomac River to Virginia.

The wealthy flee their homes in Chevy Chase, Potomac, Roland Park and Severna Park. Millionaires are desperate to save themselves and their loved ones from the Millionaires’ Tax. They’re willing to start over as refugees in Virginia or Pennsylvania.

People, get a grip!

You’re flashing on John Steinbeck’s Joad family migrating from Oklahoma to California in their broken-down truck. That was the Depression and the Dust Bowl, the “Worst Hard Times.” Let’s have a little perspective.

The most overworked canard in Maryland politics is that “millionaires will leave Maryland to avoid taxes.”

Tax paranoia syndrome is sweeping through Maryland’s General Assembly. Centers of infection include the Montgomery County and Baltimore County delegations. Symptoms are fever, impaired logic, and susceptibility to political nonsense.

See, when a respected county executive and respected state senators repeat a political canard over and over, it becomes an urban myth. With endless repetition, people start to believe it. The politicians even start to believe the canard themselves.

The anti-tax hysteria is not an equal-opportunity paranoia. It doesn’t extend to taxes on the poor, the working class, the middle class or senior citizens. Maryland politicians are only paranoid about taxing the rich.

During the 2006 election cycle, every do-gooder in the state signed the pledge to double the regressive cigarette tax. During the Special Session, legislators didn’t bat an eye about raising the regressive sales tax.

But let Gov. Martin O’Malley say the words “progressive income tax,” and Montgomery County’s Democratic senators want to hide under the bed.

Most Maryland politicians are hoping the slots referendum will pass, so that the General Assembly won’t have to tax the wealthy. Legislators think it’s OK to tax the working class, the middle class, and senior citizens at slots casinos. The Montgomery delegation imagines Montgomery County as a tax haven for the rich, and the rest of the state as a slots haven for the poor.

People, get a grip on reality.

The decision on where to live and do business is based on many factors. Rich people live in Maryland because it’s the Land of Pleasant Living. They aren’t going to uproot themselves and their families and flee to low-tax states. And if a millionaire does decide to sell his mansion or horse farm, who is going to buy it? Another millionaire! Millionaires are fungible, seems to me.

Would a progressive income tax impact Maryland’s ability to attract new business?

That’s asking the wrong question. Business follows supply and demand. Businesses go where they can sell their products and services, and where there is a supply of good schools and educated workers, and access to transportation. Maryland is at the crossroads of the East Coast. By the way, have you heard about BRAC?

The question for Maryland is not how to attract or retain more businesses and millionaires.

The question for Maryland is how to plan for and manage the development that is bearing down on us in the next few years, ready or not. Our infrastructure and environment are going to be challenged by unavoidable growth. We don’t need to beg for development. We’re going to have more than we can handle.

The anti-tax hysteria will run its course. Until then, I recommend that Montgomery County senators take two aspirin and read Wealth and Our Commonwealth, by Bill Gates Sr. and Chuck Collins. — Bernie Hayden

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