Governor Martin O’Malley’s Ultimate Hypocrisy
July 27, 2012
Taxpayers expect a certain level of hypocrisy from their elected leaders. But, this week Maryland Governor Martin O’Malley may have taken the prize for the most blatant and shameless form of hypocrisy. Earlier this year, the Maryland General Assembly passed and Governor O’Malley signed legislation raising income taxes on workers making more than $100,000, families earning in excess of $150,000. The state increased the marriage penalty and shifted pension costs to localities, engaging in some creative accounting to hide its unfunded obligations. Maryland’s state-local income rate now stands at 8.95 percent — the fourth-highest in the nation. At the same time, Governor O’Malley has been trying to convene a special session to work out a plan to give a tax break for casinos, particularly a casino at National Harbor. The plan calls for reducing the tax rate on gambling revenue from 67 percent to about 52 percent.
This week, the Democratic Governors Association (DGA) sent an email to their supporters praising the U.S. Senate’s passage of a bill that holds tax rates constant for families earning less than $250,000. It also accuses Republicans of opposing “middle-class tax cuts.” The incredible irony of this message is that it comes from the DGA, which is chaired by Maryland Governor Martin O’Malley, one of the biggest proponents of tax increases in the United States. (click here to view TPA’s television ad opposing the special session).
The policies of Governor O’Malley look even further out of the mainstream, when compared those of the Senate Democrats. To be sure, the Senate Democrats that passed the legislation engage in a verbal sleight of hand when they talk of “middle class tax cuts.” In fact, these rates have been set in stone for nearly a decade. Nothing is being cut. A more accurate description of the bill would explain that the plan keeps tax rates as they are for people making under a certain amount of income. And a more common-sense policy would not raise taxes on anyone, at a time when small businesses face substantial regulatory burdens and larger businesses have already been sending wealth overseas to countries with lower tax rates.
Nevertheless, the Maryland Legislature is acting more recklessly than the U.S. Senate. In addition to its tax hikes on individuals and families, many members of the state House and Senate seek to cut tax rates for billionaire casino operators, to offset the loss of revenue to a vendor to operate a potential casino at National Harbor. The state is asking taxpayers to sacrifice their income to underwrite the bill for casino operators. That is the definition of corporate welfare.
Whatever the merits of expanding gaming in Maryland, a vibrant economy is not created by taking resources from workers and small businesses and chasing them out of their homes into another state. Asking them to subsidize corporations adds further insult to injury.