Howard County Maryland Blog

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Archive for the ‘Taxes’ Category

Annapolis proposes a tax cut?

Posted by Ed C on Saturday, March 21, 2009

[Update] – Well it looks like I messed this one up. I misinterpreted the statement about the $60 million hit. This is just another confirmation that the state and county income tax revenues are going to be way down this year. Thanks to Warren Miller for the clarification. Ed C.

Original is below the fold if you really want to see how far off I was on this one.
Read the rest of this entry »

Posted in Ed C, General Assembly, Maryland, Taxes | Leave a Comment »

Forget Turbo-Tax. Make them use pencils and maybe a calculator.

Posted by Ed C on Friday, January 23, 2009

I have a modest proposal to help simplify our tax code.  If Timothy Geithner, former International Monetary Fund official, former president of the Federal Reserve Bank of New York and now U.S. Treasury Secretary can’t properly file a correct tax return (even when using Turbo Tax) then maybe we should go back and look at the whole 16,845 pages of the tax code and start over.

My proposal is that all elected officials that vote on the tax code (and maybe those that enforce it) would be required to fill out their own forms using nothing more than a pencil, a calculator and a phone that can only dial the IRS help line (no cheating by texting your accountant on your Blackberry.)  Come tax time, the representatives would be assigned to a table in the Congressional cafeteria or a local classroom that would be patrolled by monitors (think taking your SATs again.) with only their receipts and the IRS booklets and forms to guide them.  When completed, the current tax returns and those from the past 6 years would be immediately audited by both the IRS computers and by teams of trained ninja accountants, with any errors or omissions flagged for prosecution and public ridicule.

I’m pretty sure by the end of the first session we will see a truly bipartisan bill that would make Steve Forbes smile fly through Congress before another April 15th rolls around again.

Posted in Ed C, Taxes | Leave a Comment »

2009 State Business Tax Climate – MD sinking like a rock?

Posted by Ed C on Monday, October 13, 2008

Remember when Gov. O’Malley said that he wanted to raise taxes to make Maryland more “competitive” with our neighboring states?  The Tax Foundation has released its annual comparison of the Business Tax Climate (Which States Are Best for Business?  2009 State Business Tax Climate Index – Six Edition).  The summary is here and the full report (pdf) is available here.

How did Maryland fare this year?

Maryland ranks 45th overall, a drastic drop from its 24th rank last year. Maryland lawmakers achieved this remarkable feat by raising most of the state’s major taxes for FY 2009. They raised the corporate income tax rate to 8.25% from 7%, the sales tax rate to 6% from 5%, and the cigarette excise tax to $2.00 from $1.00 per pack. They also created four new income tax brackets, raising taxes on filers earning more than $150,000 per year. Maryland’s top personal income tax rate is now 6.25% (up from 4.75%); that’s on top of a weighted average local option rate of 2.98%. Maryland now has by far the worst personal income tax in the country, with a significantly lower score than second-place California.

How large was this change compared to other states? A histogram generated from the change from 2008 to 2009 in Table 1 shows how Maryland stands out from the crowd this year.

2008 - 2009 Rank Change Histogram

2008 - 2009 Rank Change Histogram

The ten worst business tax climate state ranks are:

  • 41. Minnesota
  • 42. Nebraska
  • 43. Vermont
  • 44. Iowa
  • 45. Maryland
  • 46. Rhode Island
  • 47. Ohio
  • 48. California
  • 49. New York
  • 50. New Jersey.

As for our neighbors?  Delaware ranks 10th, Virgina 15th, and Pennsylvania 28th.

Posted in Ed C, Maryland, Taxes | 5 Comments »

Republican TaxInUs Maximus Rally – Saturday 4/12 11:45 AM – 2:00 PM

Posted by Ed C on Thursday, April 10, 2008

Unhappy with Gov. O’Malley, the Special Session and the General Assembly?

The Howard County Republican Club is holding a rally April 12th (Saturday) at 5550 Sterrett Place (Across from the Columbia Mall, near the Exxon station.) to celebrate TaxInUs Maximus Day. Stop by and show you support and you can receive either of the bumper stickers (shown below) to let the Governor and the General Assembly know your feelings.

You can also get more information or a bumper sticker from the Howard County Republican Club if you can’t make Saturday.

You can watch Tom D’Asto’s appearance on Fox 45 Tuesday morning here.

Posted in General Assembly, O'Malley, Taxes | Leave a Comment »

Beware the brackets – a hidden way to increase county spending?

Posted by Ed C on Monday, April 7, 2008

Buried in Howard County Bill 15-2008 (pdf) are a set of double brackets that may be a back door attempt by Ken Ulman to increase county spending. The introduction seems innocent enough (emphasis added):

AN ACT amending certain definitions; amending the amount and clarifying the enforcement of the mobile home park refuse collection charge; clarifying the fee for the collection of excess refuse; amending the refuse collection charge assistance program to clarify that the Department of Finance shall administer the program and to amend the amount of the credit; making certain technical corrections; and generally related to refuse collection charges in Howard County.

But a closer look at those pesky “certain technical corrections” under Section 20.900:

Section 20.900. Definitions.
(e) Refuse Collection Service: Refuse Collection Service means the collection and disposal by the county of solid waste[[, excluding the separate collection and processing of recyclable materials]].

Currently trash collection and disposal costs are paid with a annual $175 fee paid by Howard County residents, while the the costs associated with recycling are paid from the general fund. If this legislation is adopted as currently written, the costs for both programs will fall under the “trash collection” fee.

So what? We the taxpayer pay for both anyway, what difference does it make what accounting bin the money comes from? Well, according to public works director James M. Irvin (from the Baltimore Sun: Ulman wants recycling costs moved)

The trash fee raised $14 million for this fiscal year, which is close to what the county expects to pay for trash disposal, according to public works director James M. Irvin. Shifting recycling costs to that fund would mean more revenue would be needed to cover costs.

The current costs for collection in the recycling program is $5 million. That cost is offset by $1.4 million in the sale of recycled materials. This “technical correction” will place an additional $3.6 million dollar of costs into the trash collection “account.”

The current county trash disposal contract expires in 2013 and County officials are expecting a large jump in costs. So, when the county looks to increase the $175.00 fee, the total costs are going to appear even higher (about $45 per household)  when the recycling costs and the general trash collection fees are combined.

If this change passes, will Ken Ulman and the County Council reduce the general budget and reduce our taxes to offset this change?  Or, will this become “found money” and spent elsewhere, effectively increasing or tax burden?

Greg Fox (R-District 5) is going to seek such an amendment, but I was unable to find it posted on the County web site.

Posted in Budget, Ed C, Howard County, Taxes, Ulman | Leave a Comment »

The fiscal state of Howard County depends on a few very weathy tax payers?

Posted by Ed C on Monday, December 31, 2007

Did anyone tell Martin O’Malley, Mike Miller, Mike Busch and the rest of the Democrats in the General Assembly before their special session this little fact from Howard County Budget Director Raymond S. Wacks (from the Baltimore Sun, Robey urges Ulman to alter state’s view of county finances):

The county can count on a steady 5 percent to 6 percent annual increase in property tax revenues based on growing home values, but Wacks said income tax receipts can fluctuate, especially if a relatively few very wealthy taxpayers change or delay their payments. [emphasis added]

Really. With new tax increases about to go into effect in less than 24 hours, especially the ones that target those very same wealthy taxpayers, did anyone think it could have a negative effect?

Well, at least Sen. Allan Kittleman and Del. Gail Bates get it:

“Big-money people are leaving to go to Florida,” Kittleman said, explaining that several constituents have told him that they live in Florida part time and might convert to full-time residents.

Bates said the owner of a computer services company told her of doing something similar, if the General Assembly leaves that portion of the sales tax intact.

I though tax cuts “cost money” and raising taxes “made money”? Is Mr. Wacks contradicting the Democratic Party wisdom? Besides, how can the tax receipts from a relatively few taxpayers effect the county to any extent? I’ve could have sworn that I’ve heard elected officials state that the wealthy don’t pay their fair share of taxes.

Mr Robey’s implication that Gov. O’Malley and the state of Maryland will probably reward the fiscally irresponsible Montgomery County (with a projected 70 million dollar deficit by June 30th) will have to be (hopefully) another post.

Posted in Democrats, Ed C, General Assembly, Maryland, Taxes | 2 Comments »

Did Ken Ulman just move into a higher tax bracket?

Posted by Ed C on Sunday, December 2, 2007

Well, he will have if he files as an individual. As reported in the Baltimore Sun (2.9% pay raises for Ulman, council set to go into effect)

Ulman’s salary increases from $147,000 to $151,263, while the County Council members’ salaries rise from $49,000 to $50,421.

With the new O’Malley tax plan, if Mr. Ulman were to file as an individual he would find himself in the new tax bracket designed for the “semi-rich” and face the new rate of 5.5% for income over $150,000. The really rich, as defined by the Maryland democrats get the privilege of paying 5.75%. (Gov. O’Malley proposed a top rate of 6.5%)

Did the MD democrats index these new income tax brackets to inflation? Did they learn anything from the AMT? When originally passed in 1969, the AMT was designed to target 155 “high-income” households.

From Wikipedia:

Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.

Just as the failure to demonstrate a little foresight with the AMT, are we in a situation where those that think they are targeting only the “rich” will find that they also hit the “middle-class” over time?

But hey, don’t worry, we live in one of the wealthiest counties and states in America – We can afford it. (Especially if you’re an elected official with automatic, annual pay increases.)

Posted in Ed C, General, Howard County, Maryland, O'Malley, Taxes, Ulman | 5 Comments »

Senator Robey – Honorable Mention

Posted by David Keelan on Wednesday, November 7, 2007

Senator Jim Robey got an honorable mention on the “O’Malley Watch” blog.

Apparantly when it comes to citizen input on the massive tax increases making their way through the special session of the General Assembly our:

“…opinions are worthless.”

Par for the course if you ask me.

The full excerpt here:

You can tell that the e-mails and phone calls are having some effect.  According to reports on the Ed Norris Radio Show, the Senator representing Columbia, James Robey (he might live there now too) has staffers that are telling callers and e-mailers that their opinions are worthless. Well, Robey did vote for every tax increase, but let it put a smile on your face to know that you’re hard work is at least pissing them off.  Keep it up.  James Robey: (410) 841-3572 (office number)

Posted in Budget, Maryland, Taxes | 4 Comments »

It’s expensive to live in Howard County – Steven Sattler, CA Communications Director

Posted by Ed C on Thursday, August 30, 2007

From the Baltimore Sun: CA officials paid well.

The Columbia Association paid about $1.2 million in salaries to the top 8 association officials. The CA has an annual budget of $50 million.

The association manages open space, swimming pools and athletic facilities in Columbia, with much of its annual budget coming from taxlike liens paid by every property owner in the planned town.

I enjoy living in Columbia and use the facilities offered by CA regularly. That said, maybe some of the “expense” of living here should be attributed to that “taxlike” lien.

Posted in Ed C, Howard County, Taxes | 4 Comments »

The Wealthiest State in the Nation

Posted by Jim Walsh on Wednesday, August 29, 2007

The U.S. Census Bureau just announced its annual income and poverty estimates for the nation.   Maryland has the distinction of having the highest median household income ($65,144) and the lowest poverty rate (7.8%) in the U.S.  Howard County had the highest median household income in Maryland ($94,260) and ranked third among all counties nationally (behind only Fairfax and Loudoun counties in Virginia).

Combine these high income – low poverty figures with the high tax rates imposed here, and I’m at a loss to see how the State and its subdivisions can be complaining about “structural deficits” and a lack of revenue.  I recall many high-tax apologists spin our tax burden by noting that our taxes, as a percentage of household income, are at about the national average.  That argument has never made any sense to me.  If government is supposed to address its citizens’ needs, should not those needs, and the level of government services, decrease as the citizens’ wealth increase?  Given our high income levels, our tax rates should be below average.  Am I missing something?

Posted in Jim Walsh, Maryland, Taxes | 10 Comments »