Wednesday, Aug. 20, 2008

State getting bad rap for taxes, Barve says

Tax foundation chief says families hurting

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Is Maryland a high-tax state?

Del. Kumar Barve thinks the Free State gets a bad rap.

A recent Tax Foundation study ranked Maryland fourth in the nation for its state-local tax burden. Ahead of Maryland were New York, New Jersey and Connecticut.

"Of the states ranked ahead of us, they're in the Northeast," said Barve, who sits on the House Ways and Means Committee. "Politically, people in the Northeast like good schools and good roads. And good schools and good roads are a good thing to have."

A year ago, the study ranked Maryland fifth.

"What are you doing, going for the gold? We're No. 4 right now. Do we want to be No. 1?" joked Herbert H. McMillan, a former delegate who is now president of the Maryland Tax Association. "The stones don't have much blood right now. They've been squeezed pretty hard."

The Tax Foundation, a nonpartisan tax research group based in Washington, used data from the U.S. Census Bureau and the Bureau of Economic Analysis. Its study took into account commuter taxes, cross-border payments and travel to calculate the taxes residents in a state pay, said William Ahern, the group's communications director.

"From 30,000 feet, Maryland is a high-tax state," he said.

In fiscal 2008, which ended June 30, Marylanders had a per-capita annual income of $52,709. They paid $5,669 in taxes, or 10.8 percent, according to the study.

Residents paid $4,062 per capita to the state, and $1,607 per capita to other states.

The figures take into account the tax increases passed during the November special legislative session that took effect Jan. 1, including increases to sales, corporate income, tobacco and vehicle titling taxes.

Barve (D-Dist. 17) of Gaithersburg said that in terms of the number of dollars, Marylanders pay a lot, but they also make a lot. As a percentage of income, he said, Maryland is in the middle of the 50 states.

McMillan countered: "People, not percentages of income, pay taxes, and people are hurting right now. They deserve what they earn for their families."

Consumers are getting hit with a "perfect storm," he said, with rising gas prices and tax bills.

"The middle class in Maryland is hurting like it's never been before," he said.