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The MD Low Tax State Meme Rises Again

You might have missed this incredibly incredulous tweet from Delegate Aruna Miller, a Democrat from Montgomery County, regarding what Maryland businesses pay in state and local taxes.
 A quick look at the Council on State Taxation’s report on total state and local businesses taxes, produced by Ernst & Young shows that Maryland, shows that Maryland ranks 22nd in the nation in total business tax. 

Here is the chart from the report, reproduced with rankings.


Also, you will notice that Figure 2 in the report shows Maryland’s business tax grew 5.7 percent during FY2010-FY2011, outpacing such high tax states as California, Illinois, New Jersey, and New York.
Maryland ranks 42nd in the Tax Foundation’s Business Tax Climate Rankings. Maryland isn’t any kinder to new firms. According to the Tax Foundation’s Location Matters report, Maryland ranks 46th.  The state ranks 40th on CEO Magazine’s Best-Worst State’s for Doing Business Index. 
It is ironic that Miller tweeted this on the heels of Sheila Hixson, Ed Kasemeyer, and, Rob Garagiola the Chair of the House Ways and Means Committee, Chair Senate Budget and Taxation Committee, and Senate Majority Leader respectively, (all Democrats) signaling their willingness to consider reducing Maryland’s corporate tax rate.  
Miller, a member of Hixson’s committee, has been a co-sponsor of combined reporting legislation.  Combined reporting is a complicated tax scheme requiring corporations doing business in multiple states to pay Maryland taxes based on the combined revenues earned in other states.  
Miller appears to be aping part of the strategy (creating the appearance that Maryland is a low-tax state) Governor O’Malley used to muscle his tax hikes, through the General Assembly.  However, thanks to Change Maryland and others, everyone saw through the Potemkin Village O’Malley constructed.  
I’m not sure where Delegate Miller is getting her figures, but they don’t reflect the dreary reality of Maryland’s business climate.  Perhaps she’s been reading too many of Governor O’Malley’s factually challenged stat-cookingblog posts. 
Thanks to Scott Drenkard at The Tax Foundation for his insights. 






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