Volume 12, Issue 13 ~ March 25-31, 2004

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At Taxing Time, Reach Into the Deepest of Pockets
Ever watched those New York City street hustlers playing Three Card Monte?

No matter how fast your eyes move, you can’t quite figure out where they’ve hidden the Ace of Spades. Or under which shell the pea ended up.

We’re beginning to feel the same way about the Maryland General Assembly. When legislators adjourn April 12 (if they get out on time), we’re wondering under whose tent new taxes will be lurking.

Once upon a time, we thought if we made the Faustian bargain to open Maryland’s door to slots, we wouldn’t be slammed with more taxes. At least not as ferociously.

But with the prospect of slots seemingly slipping away, we’re hearing about bushel baskets of new tax plans in Annapolis that are more than a tad worrying.

We don’t typically gripe in this space about taxes because we like to gripe about shortcomings in government services, such as cleaning up Chesapeake Bay. And you can’t, in good conscience, gripe about both.

But tax fairness is another matter, which is why we’re having trouble understanding the complaints from Gov. Robert Ehrlich and his allies in the legislature about taxing those who can most afford it.

Let’s step back a moment. After the General Assembly goes home, we quite likely will be paying more money to slip our boats, flush our toilets and pump our septics, all resulting from the new revenue sources euphemistically called “user fees.”

We’re getting walloped in a major way with new vehicle fees of nearly $50 every two years. (Speaking of fairness, is it right for people driving 20 miles a week to pay the same fees as someone driving 200 miles?)

We might or might not be paying another penny-on-a-dollar sales tax in return, we’re told, for lowering our property tax.

So we’re having a bit of difficulty understanding the outcry from the GOP about temporarily raising the income tax rate on people making $200,000 a year.

And we’re a little befuddled about the opposition to eliminating an exemption from the state sales tax handed to salty snack maker Frito-Lay Inc. Think about your own finances for a moment while we tell you about Frito-Lay’s.

Frito-Lay is a subsidiary of Pepsico, Inc., and normally generates half or so of the company’s overall profits. In the most recent quarter, Frito-Lay’s sales rose to $2.7 billion, and Pepsico reported a 30-percent jump in profits to $897 million. A few years ago, Frito-Lay was granted a Maryland sales tax exemption in order to lure a new plant to the Free State. The plant — and jobs — never came, but Frito-Lay nonetheless pays no sales tax on its snacks.

Frito-Lay is issuing veiled warnings that if the exemption (worth $16 million) is not restored, the company might choose to expand in Pennsylvania rather than in Harford County.

Of course, Pennsylvania is wrestling with its own budget woes, and Gov. Ed Rendell is trying to hike fees on waste disposal by $5 a ton and require industries and utilities to pay a new pollution tax.

While we’re at it, why not close a few more loopholes. Progressive Maryland, an advocacy group, dug into records in the Comptroller’s office recently and reported last week that two-thirds of Maryland’s largest corporations paid no state income tax in 2001 and 2002.

In these taxing times, let Frito-Lay’s chips fall where they may — and let as few new burdens as possible fall on Marylanders who can least afford them.

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Last updated March 25, 2004 @ 2:37am.