New ideas to better the Old Line State
The “Structural” Tax Increases
By William L. Anderson, Ph.D.
Published on Wednesday, January 09, 2008
MARYLAND POLICY REPORT
Assume you have a job that brings home $3,000 each month. You have a house payment of $1,000, and your other expenses take up the rest of your paycheck. Unfortunately, your eyes are bigger than your bank account, and you then decide to purchase a house that costs you $1,500 a month.
At the same time, you do not cut back any of your other expenses, leaving you with a real problem: your current monthly expenses are going to be $500 above your income. However, you are undaunted; you calmly and confidently stride into your boss's office and demand that she give a raise because you have a "structural deficit" in your household budget, and that she should pay you an extra $500 a month to make up for it.
Most likely, you will find your request receives little sympathy from your boss and from others, who would remind you that if you did not have the revenues to cover your new expenses, perhaps you should not have pursued them in the first place.
Unfortunately, common sense does not prevail in the offices of legislators and chief executives. The state of Maryland, after running budget surpluses and maintaining a rather ordered fiscal house in the past few years, faced a $1.5 "structural deficit." In response, the governor and legislators decided to take provide an extra $1.3 billion from taxpayers to fund promises made by Gov. Martin O'Malley during his gubernatorial campaign. (The legislature claimed to have "cut" $550 million from the budget to make this plan work. Of course, these "cuts" really are nothing more than reductions in the planned increase of government spending.)
 |
Available in Adobe Acrobat PDF format. |
Navigation:
Browse By:
