The High Cost of Taxation
The accounting firm of Ernst & Young has produced a study on the impact of Governor O’Malley’s proposed tax increases, or at least the ones we know about. Key findings:
- The static sales tax changes would decrease Maryland employment, including
government jobs, by -8,334 jobs in 2012; job losses will increase to -9,274 by 2017.
- The largest job reductions in 2012 are in wholesale and retail trade (-2,341), and accommodation and food services (-1,238).
- Comparing the decrease in jobs to the amount of the static increase in state sales taxes from the rate increase, the tax rate increase will result in 9.5 jobs lost per $1 million of tax increases in 2012.
- The decreases in employment also reduce the personal income received by Maryland
residents by $461 million in 2012 and $655 million in 2017.
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- In addition to reductions in jobs and incomes, the sales tax increases are projected to decrease real investment in business machinery, equipment, structures and other capital assets. The reduction reaches $152 million by 2017.
- Section II of Table 2.2 shows that Maryland’s weaker economy will reduce state tax collections by an estimated $45 million in 2017. This will partially offset the static revenue increase in sales taxes shown in Table 2.1. In addition, local governments’ taxes will be reduced by $33 million in 2017.
There you have it. Higher taxes, lower family incomes, fewer jobs, less investment. Quite the picture of a wonderful economy.
Unsurprisingly the lefty shill group “Progressive Maryland” which sponsored a push poll earlier in the year that purported to show that Marylanders just love to pay taxes, is spitting nails. They can’t attack the findings in any meaningful way so they attack the fact that Ernst & Young got paid for their work. Well, if O’Malley has his way we won’t have to worry about that happening again, will we?