A Helpful Reminder That The Game is Rigged

Yesterday, Center Maryland columnist Josh Kurtz tried to make the case that Maryland is a business friendly state.  However, all he did was reminded us why we live in the Banana Republic of Maryland.
Kurtz writes:

This year, for maybe the first time, the two Mikes [Senate President Mike Miller and Speaker of the House Mike Busch] came together on an agenda before the legislative session even started, centered on boosting economic development and Maryland’s business climate.
The push to reduce the state’s estate tax has gotten the most headlines, but the agenda includes less controversial items, like launching a fund to help start-up cybersecurity companies, creating a commission to examine the state’s economic development programs, and requiring improved transparency on state tax forms, to show how tax dollars are being spent.
Other measures to provide tax credits for an array of business-oriented initiatives have passed the Senate and seem likely to make it out of the House in this final week of the session…


Lost in that argument is the fact that Maryland remains one of the nation’s most prosperous states by any measure, with an abundance of profitable corporations and federal agencies and installations representing the backbone of the economy. And with the high-achieving schools in Maryland, employers have readier access to a well-educated and well-rounded workforce than their counterparts in most other states do.
 Would a state with a hostile business climate roll back an estate tax that will benefit millionaires (for a terrific evisceration of the measure, see Dan Rodricks’ Baltimore Sun column of March 27)? Or push through a tax break for Lockheed Martin? Or adopt a transportation and infrastructure spending plan that most statewide and regional business organizations lobbied for? Or offer ample tax breaks to billionaire casino owners? Or work hard to nurture myriad high-tech businesses?

I agree with rolling back the estate tax.  However, calling Dan Rodricks’ myth laden screed “terrific” belies Kurtz’s own fallacies.  Rodricks calls raising the exemption threshold for Maryland’s estate tax “throwing millions of dollars at the heirs of millionaires,” “costing the state $100 million in annual revenue” over the next five years, and “giving millions to the heirs of millionaires”  
FYI to Kurtz and Rodricks: a tax cut isn’t “throwing money at millionaires” or giving them millions.  Raising the estate tax exemption is government allowing people to keep more of their own money.  To believe that a tax cut is a give away, means that you think the money already belonged to the government.  In other words, the lost revenue Rodricks weeps over was never the state of Maryland’s money to begin with.
Rodricks constantly wails about “income inequality” and under Governor Martin O’Malley it has increased substantially as evidenced by Maryland’s shrinking middle class.

Maryland’s problem is not that the rich don’t pay enough in taxes, it’s that the game is rigged against those who aren’t politically connected.
To wit:
Kurtz’s examples Maryland’s “business friendliness” are in fact examples that Maryland’s has a political climate not a true free market or “business friendly” climate.
If you consider federal agencies and installations are the “backbone” of Maryland’s economy, then our economy is an invertebrate.  What happens when the rest of the country realizes it can no longer afford to subsidize Maryland’s economy?
Citing Maryland’s “high achieving schools” that gives employers “ready access to well-educated and well-rounded workforce,” Kurtz only reinforces the fact that our school system isn’t aligned to serve students, but to meet the political needs of the state. 
Tax breaks for Lockheed Martin, casino owners, pursuing the business lobby’s transportation needs through hiking the gas tax (Kurtz left that part out), and offering loans and grants to politically favored industries is not  “business friendly,” as the layman would understand the term.  Rather they are more examples the Maryland Democratic machine picking winners and losers as it has always done.  
So yes, Maryland does have a great business climate… if you’re in the right business. 
Kurtz should know all about that because the business model of KO Pubic Affairs, the founders of Center Maryland, is based on the very cronyism and corporatism of government picking winners and losers.   Nor should it surprise anyone Kurtz’s Center Maryland colleague, Don Fry, CEO of the Greater Baltimore Committee, just happenes to chair the state commission that awarded KO client MGM Resorts the license to build a casino at National Harbor.  Fry also supported the gas tax increase.
If you’re a small business not building wind farms, providing speed cameras services, developers for Harbor Point and State Center, or building a casino at National Harbor Maryland’s business climate is not so friendly.   
If you’re one of Maryland’s sole proprietors and S-Corps paying the pass through personal income tax rate—you face the 7th highest marginal tax rates in the nation, which means the disproportionate burden of funding the every widening maw of state spending.   
But hey, if you’re one of those small businesses in Maryland’s manufacturing sector, which has shed 26,000 jobs since O’Malley took office, don’t fret, as a consolation you get the month of October!

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So thank you Josh Kurtz and your crony capitalist bosses at KO Public Affairs for reminding us that the game is rigged. 

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