Recently, on my blog, I launched a campaign to combat, what I believe, is a bad proposal that will harm Maryland. Its called the #STOPBS campaign, which comes from the first letters of the sponsors of companion bills in the Maryland House and the Senate. It aims to make the bill that seeks to lower corporate income tax rates in the State, die, effectively telling legislators “it’s not okay.”Most already know that on the Federal level, politicians are trying to lower the Federal corporate income tax rate. But right now, it is happening in people’s backyards, in State legislatures across the country. Senator David Brinkley (R-Dist. 4), who proposed SB 34, seeks to lower Maryland’s corporate income tax rate from its current 8.25% to 6%, a 2.25% drop! Brinkley, who has gotten campaign contributions, since 2005, from corporate giants, like Bank of America, Comcast, BGE and Constellation PACs (among many others), as I detailed on my blog, believes that such a tax break will make Maryland competitive with the State of Virginia. The sponsor of the same bill in the House, concurs. HB 261 is sponsored by Del. Kelly Schulz (R-Dist. 4A). Hearings in the House Ways & Means Committee are scheduled for February 26th.
In order to denounce such arguments for this tax break, one must look at what this bill actually does. The net loss in tax revenue for Fiscal Year 2014 would be over $381 million dollars. These cuts in Fiscal Year 2014 would include a decrease in funds for transportation by $63.1 million, most of which goes to the State transportation budget, a decrease in funds for Higher Education by $22.9 million, and a decrease in revenues from local highway users, by $6.1 million. As a result, the current State budget deficit, which is already insurmountable, would increase, and $37,000 dollars would be needed just to notify the 62,000 corporate filers in the State about the new rate reduction. All of these numbers are thanks to a report by the Department of Legislative Services on the matter. To summarize, these cuts would hurt students, as well as reduce the amount of money going to maintain an already failing infrastructure, which will make matters worse, and local governments, which are already feeling budget cuts.
Michael Hudson explained this in a CounterPunch article he wrote last August: “Unlike the U.S. federal government, most states and cities have constitutions that prevent them from running budget deficits. This means that when they cut property taxes, they either must borrow from the wealthy, or cut back employment and public services…Cities are defaulting from California to Alabama…This has become the main cause of America’s rising unemployment, helping drive down consumer demand… Most urban revenue is a free lunch created by taxpayer-financed roads, schools, sewers and water systems….State and local pension funds are $3 trillion behind because they are only making 1% returns these days…Debt-ridden austerity and downsizing government is being urged as if it is inevitable, not a policy choice to put bondholders and the 1% over the 99% – a reward for the lobbying money it has spent on buying politicians and misleading voters, to believe that cutting property taxes and cutting taxes on the rich will help the economy.” Hudson proposes that we default, but I believe there is something more imperative that we must deal with.
Times are tough for Americans. Nearly half of America is at or near the poverty level. Cases of individuals suffering from depression have increased in areas affected by SuperStorm Sandy. Youths, from 5th to 12th grades, are optimistic about their future, but adults are not so sure, according to recent Gallup polls. This is not the time for corporations to get a tax break. People are suffering and justice is not furthered by corporations not paying a fair share in taxes. Simply put, it is matter of fairness, equity and justice. They can cough up the money. They can stay afloat. There is no danger there. Over the past few years, corporations have been hoarding cash, and now hold more cash than ever before.
This is why I urge you to help spread this message, far and wide, across Maryland, by signing this petition, telling your legislators you want corporations in Maryland to pay their fair share of taxes and not to reduce the current tax rates. Share this with your friends; tell everyone you know about it. If enough people are mobilized, we can stop this in its tracks and let legislators know that now is the time to create jobs, invest in schools and improve infrastructure, not lower taxes for corporate entities!