Tuesday, November 20, 2007

 

A win for Delaware and Virginia and Pennsylvania...

“Maryland Comptroller Peter Franchot (D), a vocal critic of the special session, said the tax package is "regressive" and "may damage the Maryland economy, which is in a volatile and soft position right now." Experts Divided on Md. Tax Package's Effects

God help us when Peter Franchot is the voice of sanity in Maryland’s ruling party.

Comments:
Over the past 10 years the Maryland state budget has increased by an average of 8% a year. (That means it's nearly doubled in that time due to compounding.)

I don't know if I'd complain if I were doing that well.
 
I agree about Peter Pinko.

The Post today said something like, Well, the Maryland tax rates haven't been updated since the 1960s.

Since tax revenues under a flat tax go up proportionately to the increase in income, what's the big deal?
 
I do not buy Franchot's wailing and gnashing of teeth. If one philosophically opposes taxes, fine. If one practically opposes them for results that are likely to happen, fine. But to pretend that these small increases are going to turn us into Mississippi defies common sense.

For a multi-millionaire earning, say, $400K/year, his max rate will go up by .48% on about half his income. 250K x .0048 = about $1,200. I use .48% rather than .75% because state income taxes are largely deductible against federal taxes but even if that's not deducted, still around $1875.00.

Now that's real money. But closing costs on a sale and purchase of a house are 12 times that or more, maybe much more. He's not moving from Potomac to McLean.

Most of the people affected by this tax don't make 400K, more like 200-300K. Their increase will be a lot less.

Sales tax: ditto. The Shore may hurt a bit but they already hurt with Delaware waiving the "no sales tax" sign. There are morons who will put 25 dollars of gas and depreciation on a car and an extra 90 minutes of their life to save 20 dollars in taxes on 400 dollars worth of clothing that is bearing the cost of Delaware's smaller more hidden gross receipts tax that Maryland doesn't collect. So now the morons will spend 25 to save 24. Frankly, I would rather those morons drive into Delaware, anything to get the stupid to self-select out of my motoring universe works for me.

If you go to Takoma Park (as I know you often do to get your Nuclear-Free Zone gear) or Friendship Heights, you see plenty of business on both sides of the line. In Friendship Heights, it's stark: a cluster of restaurants on the DC side teeming with lines out the door 200 yards from Maryland. Try to get a table at the Cheesecake Factory. But the sales tax is double on that side of the line. I guess I am saying that the overwhelming number of customers are price inelastic around 1% changes in price.

This doesn't mean that the tax is a great idea, only that you may safely return your "Peter Franchot is a leftist windbag" seat to its previous upright position. The best reason to oppose this tax, in my view, is that Maryland is Maryland and that the money is already pre-marked for dirty baksheesh.
 
thanks for the comments - I need to address some of Bruce's points but alas, time is not cooperating
 
I'm trying to tap into discussion, posts, etc., of Peter Franchot, the Takoma Park gasbag who seems to have started running for governor the day after he was elected comptroller.

I need to e-mail the webmaster at the comptroller's website and see if there a way to display without all the photos of Franchot kissing babies, etc.

Does he have no shame? (Dumb question.)
 
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