A BLUEPRINT FOR TURNING MARYLAND INTO THE NEXT ZERO INCOME TAX STATE
Our objective is to restore economic vitality to Maryland.
We cannot tax ourselves into an economic recovery, as some might believe.
It is free enterprise that creates economic growth and jobs, not the government which can only survive and be supported by a free enterprise economy.
When you tax income, you reduce economic activity. When economic activity increases through consumer and business spending, our sales tax revenues on this economic activity will substantially increase – and begin to displace a government reliance on picking the pockets of Marylanders and our businesses by taking a portion of their income.
Right now, our state taxes both economic activity of consumers and business through sales taxes, after it has taxed their income – and reduce their ability to engage in economic activity.
Government is overhead on the economy – hired by taxpayers to provide services, like infrastructure, public education, and public safety.
When government taxes its citizens and businesses with reckless abandon – ignorant of the consequences, and lays on over that excessive and intrusive regulation, the only result is economic decline.
"Government spending is taxation. When you look at this, I've never heard of a poor person spending himself into prosperity, let alone, taxing himself into prosperity."
Leading national economist, Dr. Arthur Laffer, Ph.D.
- The current Administration and the legislature have contributed substantially to the economic decline that is occurring in our state – as companies leave, small businesses go out of business, and people move to other states for jobs or to retire in income tax free states.
- Beretta USA, a Maryland business, plans to expand operations by building $45 million manufacturing plant in Tennessee – a state with no income tax. That is 300 new jobs that Maryland will not get.
- Texas and Florida have continued economic growth – no income tax, to name two more. Texas' governor Rick Perry came here to recruit our businesses and people to move to his state.
In their 2012 research report entitled "Taxes Really Do Matter, A Look at the States," Dr. Laffer and Steve Moore noted:
"(O)ver the most recent 10-year period, 2001-10, the average of the nine states without income taxes—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming—had 14% growth in population—versus 9% for all states and only 5.5% for the nine highest income tax states—Oregon, Hawaii, New Jersey, California, New York, Vermont, Maryland, Maine and Ohio. Job growth in the nine no-income tax states was 5.5%, versus close to zero in the average state and -1.6% in the highest tax states. On balance, no-income tax states have two and one half times the population growth of the highest income tax states, and yes, the no-income tax states even have higher tax revenue growth than the average of all states and the highest income tax states." (Arthur B. Laffer and Stephen Moore, "Taxes Really Do Matter: A Look at the States," October16, 2012)
9 No-Income Tax States vs. 9 Highest Income Tax States
* equal-weighted average ** equal-weighted average, does not include D.C.
† 2000-09 (2010 data not yet available)
Source: Bureau of Economic Analysis, U.S. Census Bureau, Bureau of Labor Statistics, Laffer Associates
We – Republicans and Democrats -- must make Maryland attractive to business – for current businesses to stay and new ones to come – AND stop driving them away with excessive and predatory taxes and costly regulations.
How do we do this? What is "the plan"?
- The mission: Make it easy for job creators to want to stay or come to Maryland.
- Republicans, Democrats, and Independents must work together to clean up the tax and regulatory mess – because it is to all Marylanders benefit – Democrats and Republicans alike.
- We will fully review and study other zero-income tax states and apply their experience to Maryland.
- We must work together to PHASE-OUT over 5 years the state income tax on both individuals and businesses. This commitment is the first step to invite economic growth back to Maryland.
- As this phase-out begins, economic activity will increase – and continue to offset the decline in income tax revenues.
When this starts, we will see corresponding increases in:
- Sales tax revenues.
- Property values – and the corresponding property tax revenues.
- The opening of new businesses and employment opportunities, again increasing economic activity by business and consumers – further growing sales tax and property tax revenues.
- Current business expansion, spawning further economic growth – and the attendant sales and property tax revenues.
Finally, clean up and repeal Maryland's egregious and hideous taxes and stifling regulations:
- Repeal the "Rain Tax," which hits businesses and individuals alike.
- Repeal the "death taxes" which imperil family owned businesses, including family farms.
- Repeal the new gas tax, which simply increases the cost of business and takes money from families to make up for government waste and diversion of the funds the state received from the prior tax rate.
- Stop proposing taxes like the "Chicken Tax" – and looking elsewhere to pick Marylanders pockets.
- Review all specialty taxes on businesses to determine why they exist and what the revenues are used for.
- Review those regulations viewed by those regulated as egregious and excessively costly. I am asking Maryland businesses to give us their list and reasons.
- Stop regulatory strangulation of Maryland businesses.
- Clean up the organization of our state government – there are far too many departments and independent agencies – tripping over each other and stifling business and job creation.
When these things are done and enacted, Maryland will recover.
If we don't, Maryland will continue to decline.
That is what we must do – together – Democrats, Republicans and Independents.