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Progressive Neighbors Solutions to the State Budget Deficit:
A Menu of Options
Maryland is a low tax, low spending, and small government state with a flat income tax, with low corporate taxes, despite being the wealthiest state in the nation.
Progressive Neighbors supports progressive solutions to the budget deficit and respectfully recommends policies that increase taxation on those who can most easily afford to pay.
The menu that follows demonstrates that it is possible to create the revenues our state needs without slots, or a general sales tax increase. The menu generates over $3 billion in revenue.
We may not have complete agreement among ourselves on each and every component noted here, but Progressive Neighbors agrees with the basic thrust of this document and we urge our legislators to do so as well.
| Make the Income Tax Progressive | |
| Increase the income tax to 6% for those earning $150 K and above. | $327 million |
| Increase the income tax to 7.75% for those earning $500 K and above. | $410 million |
| Increase the personal exemptions and standard deduction. | -$100 million |
| Subtotal | $637 million |
| Make Corporations Pay Their Fair Share | |
| Increase the rate from 7 to 9%. | $250 million |
| Implement combined reporting. | $175 million |
| Tax the transfer of “controlling interests.” | $40 million |
| Subtotals | $465 million |
Increase Tobacco and Alcohol Taxes |
|
| Increase cigarette tax by $1. | $161 million |
| Double alcohol taxes. | $ 29 million |
| Subtotals | $190 million |
| Apply 5% Sales Taxes to Selected Services | |
| Business, Financial and Luxury Personal Services. | $750 million |
| League of Conservation Voters Green Taxes. | $166 million |
| Total | $2.208 Billion |
Source: Data provided by the Alliance
for Tax Fairness and projections based on the Puddester Commission
Report - 2002