Thursday, May 17, 2012

Democrats and State Tax Increases

Yesterday, the Maryland state legislature voted to support Democratic Gov. Martin O'Malley's proposed tax increase. This news is important in the trend it reflects concerning state finances across America. O'Malley's new taxes mean that many Maryland families will now pay an additional $700+ a year in tax. The new rate also means that Maryland's taxes are now the fourth highest in the country. Why did the Democrats do this? To pay the unions. The WPost article has a quote that stands out -

'Counties and unions for state employees, who will receive a 2 percent raise from the tax increase, praised the legislature after the House of Delegates voted 77 to 60 for the package.'

The problem for Maryland democrats is that screwing people for more money in order to maintain the union feeding frenzy, pisses people off. Major corporations are already abandoning Maryland and California, where the Democratic leadership of that state is proposing similar tax increases. Republican led Virginia, which borders Maryland, has lower tax rates and high living standards. The simple fact is that increasing numbers of people and corporations are likely to decide that Virginia and not Maryland offers the better locale for residency. Human capital is inherently moveable in the DC area.
           The broader point here is that where Democrats are in control of state politics, taxes are increasing while long term entitlement/spending reforms remain weak. In contrast, Republican run states like that of Gov. Christie's New Jersey, are pursuing reforms that increase their states attractiveness to individuals and businesses, while ensuring that the unions are not able to drag everyone along a course to bankruptcy. This polarity of choice - on the one hand, Democrats offering higher taxes and higher spending and on the other, Republicans offering lower taxes and long term reform, is increasingly evident across America. This should be the ground on which Republicans wage our political campaigns. We should be unafraid to take on unions who are the worst enemy of the vast majority of low income workers. 
             Under this President, America is heading towards a future of catastrophic debt, higher taxes and economic stagnation. These issues are of crucial importance. (Screaming about gay marriage does not help the Republican cause).

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