Tax Corruption Rife in Maryland
Study: Loopholes cost state more than $421 million
| Here are portions of a gazette.net article distributed by Transparency International. TI is a worldwide anti-corruption organization. |
by Steven T. Dennis
There's a state tax loophole for ski resorts that make fake snow. Other breaks benefit owners of country club golf courses, commercial airlines and electric utilities. There's even a junk-mail exemption.Those were among 52 quirks in the tax code that cost state coffers at least $421 million a year, according to Progressive Maryland, a liberal advocacy group. Sean Dobson, one of the writers of the report titled "Looting the Treasury, The Best Tax Breaks Money Can Buy," said at a news conference in Annapolis that the loopholes should be closed before legislators and Gov.-elect Robert L. Ehrlich Jr. talk of cutting state services to close the state's $1.8 billion budget gap.
"Ehrlich pledged on the campaign trail to clean up what he called a culture of corruption in Annapolis," Dobson said. "What could be a clearer manifestation of that corruption than a tax code riddled with giveaways to special-interest campaign contributors?"
Some of the loopholes are relatively small the sales tax exemption for the "multifuel pellet stove" costs just $25,000 a year. Others are large airlines save $59.4 million a year by not paying taxes on jet fuel. Companies save $117 million buying equipment. About $75 million goes to a historic rehabilitation tax credit. And $23.6 million goes to the heirs of folks who die with an estate valued at more than $300,000.
Others are just plain weird. The fake snow exemption costs $8,000. Country clubs save $650,000 in the name of open space. Junk mail companies receive a $3 million exemption on mail they send out of state. And a sales tax exemption on gold bullion and other precious metals costs $700,000. The state has not even estimated the cost of 18 of the tax breaks, Dobson said.
Closing loopholes should be one part of a fiscal overhaul that shifts more of the tax burden onto the wealthy and corporations, he said.
"The budget doesn't have to be balanced on the backs of working families," Dobson said. "We want to make the tax code simpler, fairer and more transparent."
Del. Elizabeth Bobo (D-Dist. 12B) of Columbia attended the news conference, acknowledging that in her eight years in the legislature, the trend has been to increase loopholes for special interests and the wealthy at the expense of working families. Bobo admitted voting for many of the loopholes, which were all enacted by the Democratic legislature.
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For a collection of even more ridiculous tax quirks, visit the Museum of Tax Oddities For a simpler, fairer alternative to complex uneven taxes, see Fred Foldvary's editorial The Rent, the Whole Rent, and Nothing but the Rent |
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